Southwest Airlines (LUV)
NYSEIndustrialsAirlinesSnapshot 2026-07-08
$48.66-1.55%
Close 2026-07-08 · 1-day change
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Track LUV free→Southwest Airlines grew revenue 12.8% year over year in Q1 2026. Profit margin improved 8.1 points to 4.6% in Q1 2026. New products raised passenger revenue 13.4% year over year. The company is cutting weak routes and moving to cloud to improve operations.
Southwest cut guidance for Q2 2026 EPS to $0.35-$0.65. Capacity growth is modest at 1.5% year over year. Debt levels rose with new loans in 2026. Route cuts may hurt network strength and revenue growth.
The stock price is near our fair value of about $50. Analysts expect about 11% revenue growth next year. Our fair value is slightly below the Street median of $53.
Breaks if: Capacity growth falls below 1.5% next 4 quarters
Reallocate capacity to higher-performing markets and optimize network operations.
Stated in 2 of last 2 quarters. Capacity increased 1.5% year-over-year in 2026-Q1, reflecting efforts to optimize network operations. The trajectory shows limited progress as capacity growth is modest, but management is reallocating to higher-return markets.
Standing thesis, reviewed periodically — not a price target or advice.
Not investment advice. Scores describe historical and current data; they are not forecasts of future returns. Consult a licensed advisor before making investment decisions.
“CEO: 'We are optimizing revenue initiatives and directing capacity toward higher-return opportunities.'”
“CEO: 'Our network optimization efforts are focused on reallocating capacity to more profitable routes.'”
Breaks if: Passenger revenue growth falls below 10% next 4 quarters
Continue to improve customer experience with new product offerings and services.
Stated in 3 of last 3 quarters. Passenger revenues increased 13.4% year-over-year, from $5.81B in 2025-Q1 to $6.59B in 2026-Q1, driven by demand for new product offerings. The trajectory is delivering as customer engagement with new products is strong.
“CEO: 'Demand for our new product offerings drove record first quarter revenues.'”
“CEO: 'Our enhanced product offerings continue to attract customers.'”
“CEO: 'We are seeing strong customer uptake of our new product features.'”
Breaks if: Operating margin falls below 3.5% next quarter
Focus on commercial, operational, and cost initiatives to drive margin expansion and revenue growth.
Stated in 4 of last 4 quarters. Operating margin improved 8.1 points year-over-year, and revenue increased 12.8% from $6.43B in 2025-Q1 to $7.25B in 2026-Q1. The trajectory is delivering as management's transformation initiatives are translating into improved financial performance.
“CEO: 'Our broad set of commercial, operational, and cost initiatives is now translating into terrific results.'”
“CEO: 'Transformation initiatives are on track and delivering expected benefits.'”
“CEO: 'We continue to implement our transformation plan with positive results.'”
“CEO: 'Our transformation initiatives are progressing well, contributing to improved margins.'”
Breaks if: YoY revenue growth falls below 10% next 4 quarters
Focus on commercial, operational, and cost initiatives to drive margin expansion and revenue growth.
Stated in 4 of last 4 quarters. Operating margin improved 8.1 points year-over-year, and revenue increased 12.8% from $6.43B in 2025-Q1 to $7.25B in 2026-Q1. The trajectory is delivering as management's transformation initiatives are translating into improved financial performance.
“CEO: 'Our broad set of commercial, operational, and cost initiatives is now translating into terrific results.'”
“CEO: 'Transformation initiatives are on track and delivering expected benefits.'”
“CEO: 'We continue to implement our transformation plan with positive results.'”
“CEO: 'Our transformation initiatives are progressing well, contributing to improved margins.'”