Southwest Airlines (LUV)

NYSEIndustrialsAirlines, Airports & Air ServicesSnapshot 2026-10-15

$39.50-3.26%

Close 2026-10-16 · 1-day change

Read the published Living FV report summary

Investment OutlookAs of Oct 15, 2026

What could strengthen or challenge Southwest Airlines’s outlook?

The long-term thesis, the evidence coming in, and the environment around it. Thesis dated Jul 8, 2026.

Higher potential upsideImproving expectations

Next-FY EPS estimate change · 30 days

-9.4%

+10% or more+5%0%−5%−10% or less

4.64 → 4.21 EPS · FY ending Dec 31, 2027 · 14 analysts

Higher risk of downsideWeakening expectations

One observable signal. This measures changing earnings expectations, not the probability of a gain or loss.

How this is measured

Change in the same fiscal period’s mean EPS estimate from Sep 15, 2026 to Oct 15, 2026: (new ÷ prior − 1). Contributor count changed from 15 to 14; this is not the number of analysts revising. Source: FMP consensus snapshots. The ±10% axis is a display range.

Living FV™

Living Fair Value by QuarterlyIQ

A valuation that evolves as the business changes.

A published Living FV snapshot is not available yet. The valuation workflow remains discoverable; a market target cannot supply the missing evidence.

View Living FV report and workflow

What the Thesis Depends On

4 key conditions need to be met for the investment thesis to play out.

Key Factor	Why It Matters	Current Status	Break Condition	Latest Evidence
Capacity growth of at least 1.5% year over year	Southwest Airlines grew revenue 12.8% year over year in Q1 2026.	Under Pressure	Capacity growth falls below 1.5% next 4 quarters	Direct metric needs a verified mapping The published measure or accounting basis is not supported by an exact source binding. Source date unavailableLast status assessment Oct 15, 2026Compare required operating outcomes Compare scope, accounting basis and period before treating this evidence as progress against an annual requirement. Management context Stated as a priority in 4 of last 6 quarters. Capacity increased modestly by 0.2% in 2026-Q2 with full-year 2026 growth guidance lowered to approximately 1.5% from prior 2%. Management has emphasized network optimization including suspending operations at underperforming airports and reallocating capacity. The trajectory shows active management of capacity to improve returns. Delivery assessment Oct 15, 2026
Passenger revenue growth of at least 10% year over year	New products raised passenger revenue 13.4% year over year.	Improving	Passenger revenue growth falls below 10% next 4 quarters	Passenger revenue growth: 16.87% FY2026-Q2; reported segment. Published target: >=10% YoY. Target period is not explicitly aligned with this observation. Source published Jul 23, 202616.870379 percent · calculatedLast status assessment Oct 15, 2026 Measurement source Passenger · reported segment FY2026-Q2 · Period ending Jun 30, 2026 Source: stock_segment_revenue. Reference: 2026-Q2. Source status: vendor observation. Compare required operating outcomes Compare scope, accounting basis and period before treating this evidence as progress against an annual requirement.
Operating margin near 4.6% or higher	Profit margin improved 8.1 points to 4.6% in Q1 2026.	Under Pressure	Operating margin falls below 3.5% next quarter	Operating margin: 3.38% FY2026-Q2; GAAP. Published target: >=4.6%. Target period is not explicitly aligned with this observation. Source published Jul 23, 20263.379981 percent · calculatedSource reportLast status assessment Oct 15, 2026 Measurement source consolidated · GAAP FY2026-Q2 · Period ending Jun 30, 2026 Source: company_financial_results. Reference: 405b821a-d6c5-4609-97a2-09cf72e0d38c. Source status: eligible. Compare required operating outcomes Compare scope, accounting basis and period before treating this evidence as progress against an annual requirement.
Total revenue growth of at least 10% year over year	Southwest Airlines grew revenue 12.8% year over year in Q1 2026.	Under Pressure	YoY revenue growth falls below 10% next 4 quarters	Revenue growth: 16.4% FY2026-Q2; GAAP. Published target: >=10% YoY. Target period is not explicitly aligned with this observation. Source published Jul 23, 202616.399779 percent · calculatedSource reportLast status assessment Oct 15, 2026 Measurement source consolidated · GAAP FY2026-Q2 · Period ending Jun 30, 2026 Source: company_financial_results. Reference: 405b821a-d6c5-4609-97a2-09cf72e0d38c. Source status: eligible. Compare required operating outcomes Compare scope, accounting basis and period before treating this evidence as progress against an annual requirement.

Stored thesis · Jul 8, 2026. Latest Evidence uses source-matched measurements where available, alongside the last thesis-monitor assessment. Source periods and assessment dates are shown separately. A new measurement does not automatically change the published status or verify an older target.

Incoming Evidence

Compare these dated observations with the operating requirements above

Expectations trend

Same fiscal period

FY2027 · fiscal year ending 2027-12-31 · fmp

FY2027 EPS$4.21

$4.88 → $4.21 · observed estimates

FY2027 revenue$34.94B

$33.79B → $34.94B · observed estimates

Exact estimates & source dates

One fiscal period and provider throughout. At least five contributors are required for each plotted metric; missing coverage stays a gap. Axes show the observed range. Counts measure coverage, not revisions.

FY2027 estimate observations · fmp
Snapshot	EPS	Revenue	EPS / revenue analysts
2026-07-24	$4.88	$33,793,528,410	23 / 20
2026-07-25	$4.93	$34,072,361,340	24 / 21
2026-07-26	$4.93	$34,072,361,340	24 / 21
2026-07-27	$4.80	$34,028,915,747	15 / 16
2026-07-28	$4.93	$34,094,800,340	24 / 21
2026-07-29	$4.94	$34,108,705,110	24 / 21
2026-07-30	$4.94	$34,108,705,110	24 / 21
2026-07-31	$4.82	$34,019,070,298	15 / 16
2026-08-01	$4.82	$34,019,070,298	15 / 16
2026-08-02	$4.94	$34,152,409,710	24 / 21
2026-08-03	$4.94	$34,152,409,710	24 / 21
2026-08-04	$4.81	$34,086,797,571	15 / 16
2026-08-05	$4.81	$34,086,797,571	15 / 16
2026-08-06	$4.81	$34,086,797,571	15 / 16
2026-08-07	$4.89	$34,147,574,304	15 / 16
2026-08-08	$4.95	$34,152,409,710	24 / 21
2026-08-09	$4.95	$34,152,409,710	24 / 21
2026-08-10	$4.89	$34,147,574,304	15 / 16
2026-08-12	$4.89	$34,147,574,304	15 / 16
2026-08-13	$4.89	$34,147,574,304	15 / 16
2026-08-14	$4.89	$34,147,574,304	15 / 16
2026-08-15	$4.89	$34,147,574,304	15 / 16
2026-08-16	$4.89	$34,147,574,304	15 / 16
2026-08-17	$4.89	$34,147,574,304	15 / 16
2026-08-18	$4.89	$34,147,574,304	15 / 16
2026-08-19	$4.89	$34,147,574,304	15 / 16
2026-08-20	$4.87	$34,173,687,951	15 / 16
2026-08-21	$4.87	$34,173,707,950	15 / 16
2026-08-22	$4.87	$34,203,186,982	15 / 16
2026-08-23	$4.87	$34,203,186,982	15 / 16
2026-08-24	$4.87	$34,203,186,982	15 / 16
2026-08-25	$4.81	$34,256,115,647	15 / 16
2026-08-26	$4.81	$34,256,115,647	15 / 16
2026-08-27	$4.81	$34,256,115,647	15 / 16
2026-08-28	$4.81	$34,256,115,647	15 / 16
2026-08-29	$4.80	$34,256,115,647	15 / 16
2026-08-30	$4.80	$34,256,115,647	15 / 16
2026-08-31	$4.80	$34,256,115,647	15 / 16
2026-09-01	$4.80	$34,256,115,647	15 / 16
2026-09-02	$4.80	$34,256,115,647	15 / 16
2026-09-03	$4.79	$34,266,115,647	15 / 16
2026-09-04	$4.76	$34,271,096,981	15 / 16
2026-09-05	$4.76	$34,271,096,981	15 / 16
2026-09-06	$4.76	$34,271,096,981	15 / 16
2026-09-07	$4.76	$34,271,096,981	15 / 16
2026-09-08	$4.76	$34,271,111,981	15 / 16
2026-09-09	$4.76	$34,271,111,981	15 / 16
2026-09-10	$4.73	$34,253,961,981	15 / 16
2026-09-11	$4.72	$34,285,766,026	15 / 16
2026-09-12	$4.64	$34,285,766,026	15 / 16
2026-09-13	$4.64	$34,285,766,026	15 / 16
2026-09-14	$4.64	$34,285,766,026	15 / 16
2026-09-15	$4.64	$34,285,766,026	15 / 16
2026-09-16	$4.64	$34,285,766,026	15 / 16
2026-09-17	$4.61	$34,285,766,026	15 / 16
2026-09-18	$4.61	$34,285,766,026	15 / 16
2026-09-19	$4.61	$34,285,766,026	15 / 16
2026-09-20	$4.61	$34,328,940,807	14 / 16
2026-09-21	$4.61	$34,328,940,807	14 / 16
2026-09-22	$4.61	$34,328,940,807	14 / 16
2026-09-23	$4.61	$34,328,940,807	14 / 16
2026-09-24	$4.61	$34,328,940,807	14 / 16
2026-09-25	$4.59	$34,346,171,571	14 / 16
2026-09-26	$4.59	$34,451,676,333	14 / 16
2026-09-27	$4.59	$34,451,676,333	14 / 16
2026-09-28	$4.53	$34,451,676,333	14 / 16
2026-09-29	$4.55	$34,542,447,071	14 / 16
2026-09-30	$4.55	$34,542,447,071	14 / 16
2026-10-01	$4.55	$34,542,447,071	14 / 16
2026-10-02	$4.53	$34,586,731,515	14 / 16
2026-10-03	$4.48	$34,679,651,182	14 / 16
2026-10-04	$4.48	$34,679,651,182	14 / 16
2026-10-05	$4.48	$34,679,651,182	14 / 16
2026-10-06	$4.44	$34,721,775,789	14 / 16
2026-10-07	$4.41	$34,815,367,423	14 / 16
2026-10-08	$4.30	$34,918,203,370	14 / 16
2026-10-09	$4.21	$34,935,854,180	14 / 16
2026-10-10	$4.21	$34,935,854,180	14 / 16
2026-10-11	$4.21	$34,935,854,180	14 / 16
2026-10-12	$4.21	$34,935,854,180	14 / 16
2026-10-13	$4.21	$34,935,854,180	14 / 16
2026-10-14	$4.21	$34,935,854,180	14 / 16
2026-10-15	$4.21	$34,935,854,180	14 / 16

Revenue and EPS estimates track expectations. They are not delivered results or like-for-like proof of a required annual path.

Compare required revenue and earnings

Analyst view

Monthly observations

Buy / Strong BuyHoldSell / Strong Sell

Exact monthly counts

Monthly rating snapshots · fmp. Missing snapshots are not zero.
Date	Buy*	Hold	Sell*
2026-05-01	11	10	5
2026-06-01	11	9	5
2026-07-01	11	9	5
2026-08-01	11	10	5
2026-09-01	11	11	4
2026-10-01	11	11	3

*Buy includes Strong Buy; Sell includes Strong Sell. Monthly counts describe the analyst mix, not the firms behind each recent action.

Latest: 11 Buy / Strong Buy · 11 Hold · 3 Sell / Strong Sell

1 upgrades0 downgrades4 maintains

Recent actions · Sep 16–Oct 15 · 5 recorded

Price-target changes

30 days

○ Previous · ● Latest · common dollar scale

Raymond JamesOct 7 · prior Aug 24

$54.00 → $55.00+1.9%

BMO CapitalSep 28 · prior Jul 24

$60.00 → $50.00-16.7%

Redburn PartnersSep 18

$40.00New observation · no comparable prior

$0$33.00$66.00

1 raises · 1 cuts · 0 unchanged · 1 without a comparable prior

How this is measured

Sep 16, 2026–Oct 15, 2026. Each firm's latest positive target is paired only with its immediately prior positive target from the same provider, at most 180 days earlier. Unmatched observations have one dot; conflicting observations are not compared.

Outlook in Brief

The evidence, the remaining questions, and what comes next

What's improving

No recovery evidence is reported in the available driver assessments.

Still unresolved / key risks

Capacity growth of at least 1.5% year over yearPublished status: Under Pressure
Passenger revenue growth of at least 10% year over yearPassenger revenue growth: 16.87%
Operating margin near 4.6% or higherPublished status: Under Pressure
Total revenue growth of at least 10% year over yearPublished status: Under Pressure

Next proof point

Oct 21, 2026

Look for updated results and guidance against the published targets, plus direct evidence for unresolved drivers.

Review earnings

Bottom line

4 of 4 published conditions remain under pressure or need verification. The next results need to address those conditions.

The dated weekly assessment and its assumptions are available in Read detailed Outlook.

Historical risk context

Observed price history; separate from operating scenarios

Price sensitivity

1.5%Typical daily move · historical

Downside history

-33.5%Maximum drawdown · trailing year

Read detailed Outlook Company context, assumptions & risks

Southwest Airlines outlook in detail

The weekly editorial context below is a separate assessment from the dated monitor evidence above. Recovery observations do not automatically change the published thesis. Unverified outside influences are hypotheses, not measured driver evidence.

Updated Oct 10, 2026

What kind of bet this is

This investment represents a durable compounder with a focus on executing business transformation and cost discipline. The current thesis state is intact, supported by strong recent financial performance, though management execution remains volatile.

What's priced into Southwest Airlines

The market seems to have priced in a neutral valuation, with LUV appearing cheap compared to its peers. There is an expectations gap, suggesting that the market may not fully recognize the potential for continued revenue and margin growth.

What the fundamentals likely do

Fundamentals are likely to show continued strength, with management on track to execute transformation initiatives and maintain cost discipline. However, there is a moderate risk of missing earnings expectations, given the recent performance of industry peers.

What Southwest Airlines hinges on

The thesis hinges on the performance of sector bellwethers like DAL, UAL, and RYAAY, which could influence LUV's trajectory. Any cuts in guidance from LUV would be a significant negative signal, while continued positive performance from peers could provide a favorable lift.