Stock Valuation / LUV
Is Southwest Airlines Co. (LUV) Overvalued? Fair Value & 5-Year Target
Southwest Airlines Co. trades at $40.65 (P/E 25.73). Our reference model estimates a fair value of $30.77 at its recent average P/E of 19.47.
| Current price | $40.65 |
|---|---|
| Current EPS | $1.58 |
| Current P/E | 25.73 |
| Average P/E | 19.47 |
| Fair value (at avg P/E) | $30.77 |
| Upside to fair value | -24.3% |
| Illustrative 5-yr target (25× P/E, 15% growth) | $79.45 |
What drives LUV's valuation
Changing either assumption moves the target: a higher P/E multiple or faster EPS growth raises fair value, a lower multiple or slower growth lowers it. The interactive dashboard lets you edit both and re-run the model instantly.
About Southwest Airlines Co.
Southwest Airlines Co. operates as a passenger airline company that provides scheduled air transportation services in the United States and internationally. It also provides Rapid Rewards loyalty program; SWABIZ, an online booking tool; and inflight entertainment platform that includes movies-on-demand live and on-demand television, flight tracker, and additional curated content, as well as a variety of premium snacks and coffee. In addition, the company offers ancillary services, such as in-flight purchases, baggage fees, EarlyBird Check-In, and upgraded boarding, as well as transportation of pets and unaccompanied minors. As of December 31, 2025, the company operated a total fleet of 803 B
Frequently asked questions
What is LUV's fair value?
At its recent average P/E of 19.47, Southwest Airlines Co. (LUV) has a reference fair value of about $30.77, which is -24.3% versus the current price of $40.65.
Is Southwest Airlines Co. (LUV) overvalued or undervalued?
Based on the average-P/E reference model, Southwest Airlines Co. looks overvalued relative to fair value by roughly +24.3%. This is a model output, not investment advice — change the P/E and growth assumptions in the dashboard for your own view.
What is a 5-year price target for LUV?
Under an illustrative model of 25× P/E and 15% annual EPS growth, the implied 5-year target is $79.45. Adjust both inputs on the interactive page to match your assumptions.
Open the interactive LUV valuation dashboard →
Figures are for informational purposes only and are not investment advice. Data as of 2026-10-14.