Southwest Airlines (LUV)
NYSEIndustrialsAirlines, Airports & Air ServicesSnapshot 2026-09-04
$39.62+2.30%
Close 2026-09-04 · 1-day change
NYSEIndustrialsAirlines, Airports & Air ServicesSnapshot 2026-09-04
QuarterlyIQ Insights · LUV
What must go right, what could break, what the price assumes, and what evidence comes next.
The current health of the standing investment case.
Recent financial performance is holding in the top half of its industry — the reason to own it looks intact.
One-year growth currently built into the price, compared with our model's estimate.
| Measure | Marker shape | Value |
|---|---|---|
| Growth built into the price | circle | -32.3% |
| Our one-year growth estimate | diamond |
For each item: what to watch, what would become a concern, and what would make it less concerning.
A reporting-risk estimate, not a forecast of the stock-price response.
Historical relationships that met the evidence threshold. They do not prove cause or forecast a move.
Usually moved in the same direction.
Price observations: 365 days
Most sensitive to the broad stock market.
Based on historical daily prices through 2026-09-04.
Past price behavior in dollars on a $10,000 position. This does not measure permanent business risk.
How much price usually moves either way.
Use the underlying financial and sector pages to investigate the cause.
Not investment advice. Scores describe historical and current data; they are not forecasts of future returns. Consult a licensed advisor before making investment decisions.
| 10.4% |
Growth built into the price is above our model estimate.
The price assumes 42.6 percentage points less one-year growth.
The one-year revenue growth assumption on Valuation.
Model as of 2026-09-04 · Compared with 8 industry peers
LUV — capital allocation — Creation of a Direct Financial Obligation or an Obligation under an Off-Balan…
Dated 2026-08-12
Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant. On August 10, 2026, the Company entered into a new $2 billion five-year revolving credit facility agreement (the “Revolving Credit Agreement”) with a syndicate of lenders identified in the Revolving Credit Agreement. JPMorgan Chase Bank, N.A. and Citibank, N.A. act as co-administrative agents and JPMorgan Chase Bank, N.A. acts as paying agent under the Revolving Credit Agreement.…
Why it matters: A drop in operating margin shows possible cost issues and lower profits.
Worry ifOperating margin drops below 3.4% in Q3.
Less concerning ifOperating margin remains at or above 3.4% in Q3.
Why it matters: Slower membership growth may mean less customer engagement. It could also show less loyalty.
Worry ifRapid Rewards membership growth slows to less than 30% year-over-year.
Less concerning ifRapid Rewards membership growth is 30% or more each year.
Why it matters: RASM growth shows strong demand and good pricing. It shows the company can make more money.
Supportive ifRASM growth exceeds 19.5% year over year.
Worry ifRASM growth falls below 17.5% year over year.
Why it matters: The EPS guidance range of $0.35 to $0.65 will show how well the company manages costs and revenue amid high fuel prices.
Watch forAdjusted EPS guidance for Q2 2026 is above $0.65. This shows good revenue management.
Also watch forAdjusted EPS guidance for Q2 2026 is below $0.35. This shows weaker performance expectations.
We watch for confirming and disproving signals on each item. Resolutions are found automatically where possible and checked by hand for unclear cases. Last 90 days shown.
A larger daily loss that occurred about once in every 20 trading days.
Deepest peak-to-trough drop in the last year.
| Measure | Value | Meaning |
|---|---|---|
| Typical day | ±$162 on $10,000 · ±1.6% | How much price usually moves either way. |
| Bad day | $389 loss on $10,000 · 3.9% | A larger daily loss that occurred about once in every 20 trading days. |
| Largest peak-to-trough drop in the past year | $3,347 loss on $10,000 · 33.5% | Deepest peak-to-trough drop in the last year. |
Past year. 1.00 means similar movement; 1.20 means about 20% more.
Past year. 1.00 means similar movement to the sector. This is secondary context.
Latest 30 trading days, shown as an annual percentage.
Latest 252 trading days, shown as an annual percentage.
20-trading-day average in US dollars.
Trading days used by the source risk snapshot.
Past results, not a forecast. Not investment advice.
Why it matters: Earnings growth shows how well the company is doing. Strong earnings can help investors.
Supportive ifQ2 2026 earnings exceed $7.25 billion.
Worry ifQ2 2026 earnings fall below $7.25 billion.
Why it matters: Lower fuel costs can significantly improve profit margins. This is critical for earnings growth.
Supportive ifReported fuel costs per gallon are below $3.70.
Worry ifFuel costs per gallon exceed $3.75.
Why it matters: This reduction is key to Southwest's goal of becoming leaner and more efficient. It could lead to significant cost savings.
Supportive ifThe workforce reduction of 1,750 roles is completed by the end of Q2 2025.
Worry ifThe workforce reduction is delayed or not fully completed by the end of Q2 2025.
Why it matters: This range shows how well the company is managing costs and demand. It will indicate if the positive momentum continues.
Supportive ifQ3 adjusted EPS lands at or above $0.75.
Worry ifQ3 adjusted EPS falls below $0.50.
Why it matters: Higher upgrade rates show strong demand for new products and happy customers.
Supportive ifCustomer upgrade rates were above 60% for Q2.
Worry ifUpgrade rates fall below 50% for Q2.
Why it matters: Good capital allocation is key for funding growth and change.
Supportive ifManagement shares a clear plan for capital that supports growth.
Worry ifManagement fails to provide a clear capital allocation plan by the end of Q3 2026.
Why it matters: Starlink Wi-Fi deployment can make customers happier. It may also help other companies.
Supportive ifThe first planes with Starlink Wi-Fi are starting to fly.
Worry ifDelays in Starlink Wi-Fi deployment or no updates by year-end 2026.
Why it matters: New directors can bring new ideas and skills. This can help governance and performance.
Supportive ifFour new independent directors will be appointed by the end of November 2024.
Worry ifNo new independent directors will be appointed by the end of November 2024.
Why it matters: Cost control is important to keep profits steady as fuel costs rise. Success can boost profits.
Supportive ifCASM-X increases less than 3.5% year over year in Q3.
Worry ifCASM-X increases more than 4.0% year over year in Q3.
Why it matters: Better capacity growth means the network is working well. This can lead to more money.
Supportive ifCapacity growth will be more than 1.5% compared to last year in 2026.
Worry ifCapacity growth is at or below 1.5% year-over-year in 2026.
Why it matters: Higher fuel costs can hurt margins. This affects overall profits.
Worry ifFuel costs per gallon exceeding $3.75 would confirm rising cost pressures.
Less concerning ifFuel costs per gallon staying below $3.70 would indicate better cost management.