Southwest Airlines Co. (LUV) Fair Value 2026

LUV · Airlines ·

By CirclFi Research Team · Data from SEC EDGAR, FRED & GDELT

Quality Score

8.0 /10

32 fundamental signals · 11 models active

Value Trap Risk

SAFE (24/100)

Quick Summary — As of 2026-08-27, Southwest Airlines Co. (LUV) trades at $39.76, versus a $32.42 median fair value across its 11 active models — 18.5% below the current price. QOC: 8.0/10. Value Trap Risk: 24/100 (SAFE). 11/13 models active. Within that set, the Bayesian DCF component alone returns $32.00.

Key Facts

Ticker
LUV
Price
$39.76
Quality Score
8.0/10
Value Trap Risk
24/100
Models Active
11/13
Last Updated
Strength: First Chicago suggests +96.6% upside with 57% confidence
Risk: Majority of models suggest overvaluation

Is Southwest Airlines Co. (LUV) Undervalued or Overvalued in 2026?

According to CirclFi’s 11-model valuation engine, Southwest Airlines Co. (LUV) appears overvalued as of : the median of 11 independent fair value estimates is $32.42, 18.5% below the current price of $39.76. Estimates range from $10.17 to $78.18. LUV scores 8.0/10 on fundamental quality and 24/100 on value-trap risk.

For context, the median US equity CirclFi rates trades at an implied -23.7% versus its own 13-model consensus, across 3,801 rated companies as of 2026-08-27. LUV’s -18.5% gap is narrower than that market norm, and the Airlines sector median is +37.6%. Full market index →

This verdict compares price to intrinsic value only — it is not a buy or sell rating. For the decision case (bull vs bear arguments, risk factors, peers), read Should You Buy Southwest Airlines Co. Stock in 2026? →

What Fair Value Does Each Model Give LUV?

11 Intrinsic Value Models vs. Current Price ($39.76)

Core Models (Unlocked)
Model Fair Value Upside
Intrinsic · High Conviction
 $32.00 -19.5%
Ensemble · Low Conviction
 $33.48 -15.8%
Scenario · High Conviction
 $78.18 +96.6%
Intrinsic · High Conviction
 $10.17 -74.4%
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What Is LUV's Fair Value Range?

Spread across 11 independent models · $10.17 to $78.18

CirclFi's 11 active models place Southwest Airlines Co. (LUV) between $10.17 and $78.18 per share, a spread of 210% of the median. The median of that range — $32.42 — is the fair value CirclFi publishes for LUV, against a current price of $39.76.

Low · EROICHigh · First Chicago
$10.17median $32.42$78.18
Where the range comes from
Most bearish modelEROIC Spread$10.17
Most bullish modelFirst Chicago$78.18
Model agreement3 bullish · 8 bearishwide

A band this wide is itself the finding. When independent methods land far apart, they are reading a business whose value depends heavily on which lens you apply — volatile earnings, heavy reinvestment, or an asset base that cash-flow and asset-based methods score differently. That disagreement is information: it says the choice of method matters more than usual for LUV. Treat the median as one reading among several and compare the individual models below before acting.

Every figure above is one model's standalone output on LUV, not a CirclFi price target. How each model works →

What Is Southwest Airlines Co. (LUV) Worth in 2026?

According to the CirclFi Deep Alpha Valuation Engine, the balance of valuation evidence tilts cautious on Southwest Airlines Co. at its current price of $39.76. The median intrinsic value is estimated at $32.42 (-18.5% vs price), with 8 models flagging overvaluation risk. Notably, First Chicago sees the most upside at +96.6% (fair value: $78.18), while EROIC is the most conservative at -74.4% ($10.17). The spread between these extremes — +171.0% — reveals how different analytical frameworks can reach starkly different conclusions.

What Do the Models Say About LUV?

11 of 13 models are currently active for LUV. Of these, 3 models suggest upside while 8 models suggest overvaluation. Taken together, their median fair value for LUV is $32.42 — the figure CirclFi publishes as this stock's fair value. One component of that median, the Bayesian DCF, returns $32.00 on its own, implying -19.5% downside from the current price. See which stocks rank higher →

How Does LUV Rank in Airlines?

Among 17 Airlines stocks, LUV ranks #6 by Quality of Company score. CirclFi's QOC score of 8.0/10 evaluates 32 fundamental signals. A score of 8.0 indicates above-average quality.

As a vehicle manufacturer, Southwest Airlines Co. operates in a sector where units delivered is a critical driver of valuation. Investors evaluating LUV should weigh these sector-specific dynamics alongside our model-derived fair values.

Is LUV a Value Trap?

CirclFi's Value Trap algorithm assigns LUV a score of 24/100 (SAFE). This indicates minimal risk. Fundamentals are healthy. The score cross-references apparent undervaluation against fundamental deterioration signals. Browse lowest value-trap stocks →

Multi-Model Methodology

11 of 13 models are active for Southwest Airlines Co.. Broad coverage provides high confidence. Each model applies a fundamentally different valuation philosophy. See the complete methodology →

According to the CirclFi Quality of Company (QOC) framework, which evaluates 32 signals including margin stability, revenue growth trajectory, leverage, and free cash flow generation, Southwest Airlines Co. is rated at 8.0/10. This strong-tier score demonstrates strong fundamentals across the majority of our quality signals.

The gap between the most bullish and bearish model spans +171.0% — demonstrating why single-model analysis is dangerous. Browse all stocks with 13-model coverage →

Data Sources & Confidence

Every LUV valuation is built from SEC EDGAR XBRL filings — 700+ standardized financial tags. Macroeconomic context from FRED calibrates discount rates, while GDELT news sentiment feeds into our Sentiment SOTP model. All pipelines run daily. Read the complete data methodology →

Across LUV's 11 active models, average confidence is 45%. Lower confidence may reflect limited history or high volatility.

CirclFi's output is a research starting point, not a buy/sell signal. All data updates daily. Read the full methodology →

This analysis is produced by the CirclFi Valuation Engine using quantitative models applied to SEC EDGAR filings, public market feeds, and FRED macroeconomic indicators. It is not financial advice.

Read the full investment analysis: Should You Buy Southwest Airlines Co. Stock in 2026? →

Bull case, bear case, risk factors & peer comparison — updated daily

Which Similar Airlines Stocks Should You Also Analyze?

10 related Airlines stocks with 13-model coverage

LTMLATAM Airlines Group S.A.QOC 8.3CPACopa Holdings, S.A.QOC 7.9ALKAlaska Air Group, Inc.QOC 8.3ALGTAllegiant Travel CompanyQOC 7.6SKYWSkyWest, Inc.QOC 8.5JBLUJetBlue Airways CorporationQOC 7.4AALAmerican Airlines Group Inc.QOC 7.3FLYXflyExclusive, Inc.QOC 6.0DALDelta Air Lines, Inc.QOC 8.9UALUnited Airlines Holdings, Inc.QOC 8.8

Read investment analysis: LTM · CPA · ALK · ALGT · SKYW · JBLU · AAL · FLYX · DAL · UAL

Which Other Stocks Have a Similar Quality Score to LUV?

7 companies across all industries closest to LUV’s Quality of Company score of 8.0/10.

SBCFSeacoast Banking Corporation of FloridaQOC 8.0RDDTReddit, Inc.QOC 8.0BANRBanner CorporationQOC 8.0BVFLBV Financial, Inc.QOC 8.0TBCHTurtle Beach CorporationQOC 8.0FCNFTI Consulting, Inc.QOC 8.0NVDANVIDIA CorporationQOC 10.0

Read investment analysis: SBCF · RDDT · BANR · BVFL · TBCH · FCN · NVDA

What Else Do Investors Ask About Southwest Airlines Co.’s Valuation?

What is Southwest Airlines Co.'s intrinsic value in 2026?

CirclFi puts Southwest Airlines Co. (LUV)'s intrinsic value at $32.42 — the median of 11 independent model estimates as of 2026-08-27, ranging from $10.17 to $78.18. One component of that median, the Bayesian DCF, runs 10,000 Monte Carlo simulations with jump-diffusion and returns $32.00 on its own. The Quality of Company score is 8.0/10 across 32 fundamental signals. All models use SEC EDGAR filings updated daily. See our methodology page for how each model works.

Is LUV overvalued or undervalued right now?

At $39.76, 3 of 11 active models suggest LUV may be undervalued, while 8 indicate potential overvaluation. The median of all 11 fair value estimates is $32.42, 18.5% below the current price of $39.76 — a consensus view that LUV is overvalued. The assessment depends on which methodology best fits Southwest Airlines Co.'s business model in Airlines.

What does a Quality of Company score of 8.0 mean for LUV?

Southwest Airlines Co.'s QOC of 8.0/10 reflects 32 fundamental signals: profitability margins, revenue growth consistency, balance sheet leverage, free cash flow generation, and capital allocation efficiency. Scores above 7 indicate strong fundamentals and disciplined management.

How many valuation models does CirclFi run on LUV?

CirclFi analyzes LUV with 13 institutional-grade models daily: Bayesian DCF (Monte Carlo + jump-diffusion), EPV (Greenwald zero-growth), EROIC Spread (McKinsey reinvestment), First Chicago (3-scenario), Markov DDM (regime-switching), ML-RIV (machine learning residual income), Dynamic NAV (asset-based), PWERM (option-theoretic), Regime Cross-Sectional (relative), Sentiment SOTP (hybrid), CUCE Ensemble (meta-model), FTNN Topology (neural network), and RCMH-DCF (conditional regime). Currently 11 of 13 are active for this stock. Read the full methodology →

Which valuation models are most bullish and most bearish on LUV?

Of the 11 models currently active on LUV, First Chicago is the most bullish at $78.18 per share, and EROIC Spread is the most bearish at $10.17. CirclFi's published fair value for LUV is the median of that range, $32.42, not either extreme. The gap between the two ends equals 210% of the median — a wide spread, meaning the methods genuinely disagree and the median should carry less weight. Browse stocks by value-trap risk →

Is LUV a value trap in 2026?

Southwest Airlines Co.'s Value Trap score is 24/100 (SAFE). This low score indicates the current valuation is not artificially depressed by fundamental deterioration, suggesting genuine opportunity rather than a trap.

Cite this analysis — “According to CirclFi’s 11-model valuation engine, Southwest Airlines Co. (LUV) has a median fair value of $32.42 — 18.5% below the current price of $39.76 — as of 2026-08-27.” Source: circlfi.com/stock/LUV/ · Methodology
Primary sources for this LUV valuation
  • Financial statements: Southwest Airlines Co. 10-K and 10-Q filings on SEC EDGAR (CIK 0000092380) — 700+ standardized XBRL tags, published by the U.S. Securities and Exchange Commission.
  • Discount-rate inputs: FRED, Federal Reserve Bank of St. Louis — risk-free rates, VIX, yield curve, inflation.
  • News sentiment: The GDELT Project — global media tone, input to the Sentiment SOTP model.
  • Model definitions: CirclFi methodology — the published specification for all 13 models, including the academic sources each one implements.

Market data for LUV as of ; valuations recomputed .

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