LUV stock: buy or sell?

LUV stock price: $54.49 -1.07% At close on September 20th, 2019

Updated on:
September 20th, 2019

3

Shares of Southwest Airlines ended today at $54.49 and decreased a disappointing -1.07%.

Southwest Airlines Co. operates a passenger airline that provides scheduled air transportation services in the United States and near-international markets.

Should I buy LUV stock?

Even if you are a experienced or a novel trader, best trading results come from using an investing strategy that never leaves to random or subjective opinions when is the best moment to buy or sell stocks. That's why is so important to choose your own trading strategy that matches with your character as inversor. At Stocks2.com, we use very simple but trusted and powerful trend following trading strategies. Simple things usually work the best.

None of our preferred buy setups matches with Southwest Airlines stock situation right now, hence this is not a suitable entry point.

Buy setupElegible
New all-time highNo
New 52 week highNo
Price crossing up 200d MANo
100d MA crossing up 200d MANo
This is not a selling recommendation at all, just it's not the best moment to buy if you follow any of these trading strategies.

Is Southwest Airlines stock a buy?

Financial institutions and banks post stock ratings everyday. At Stocks2.com, we gathered 15 ratings published for LUV stock in the last month.

Is LUV a good stock to buy?
DateAnalyst / BrokerPrevious ratingCurrent rating
2019-9-6Berenberg Bankn/aHold
2019-9-13MacquarieNeutralOutperform
2019-8-16Wolfe ResearchMarket PerformOutperform
2019-8-14Morgan Stanleyn/aOverweight
2019-8-13ArgusBuyHold
2019-7-26CowenMarket PerformMarket Perform
2019-7-26Cowenn/aMarket Perform
2019-5-20Morgan Stanleyn/aOverweight
2019-4-8Raymond JamesOutperformMarket Perform
2019-4-26BarclaysEqual WeightEqual Weight
2019-3-8Wolfe ResearchOutperformPeer Perform
2019-3-28Imperial Capitaln/aInline
2019-3-28Credit Suisse GroupNeutralNeutral
2019-3-28Credit Suisse GroupNeutralNeutral
2019-3-27Cowenn/aMarket Perform

LUV stock analysis

Daily outlook

Southwest Airlines decreased a disappointing -1.07% and closed at $54.49.

Southwest Airlines ended today at $54.49 and decreased a disappointing -1.07%. In the last 16 days when LUV stock price broke up the SMA200d line, it gained $3.11 (6.05%). From a daily perspective, LUV is in a short term uptrend after plotting its last bottom ($50.91, on Sep 3rd) higher than the previous bottom, and its last top ($56.49, on Sep/18) also over the previous top. Now trading in between its last bottom and last top LUV might consolidate in a plain range, waiting to break out over $56.49 or down under $50.91. Since SMA50d and SMA100d crossed up on September/9, LUV price climbed $2.35 per share (4.51%).

LUV stock chart (daily)

Weekly outlook

After boosting an exceptional 6.54% in a week last week, Southwest Airlines closed this week at $54.49 and slightly fell a fateful -2.33%. Late July LUV plunged a godawful -5.19% in just one week.

Price pattern shows an uptrend with two rising tops and bottoms, and now trading upwards to the $55.74 resistance. Since late August when LUV stock price broke up the SMA40w line, it gained $3.93 (7.77%).

LUV stock chart (weekly)

LUV stock price history

LUV IPO was on January 2nd, 1980 at $0.12 per share1. Since then, LUV stock grew a 45,308.30%, with a yearly average of 1,161.80%. If you had invested $1,000 in LUV stock in 1980, it would worth $453,083.00 today.

1: Adjusted price after possible price splits or reverse-splits.

LUV stock historical price chart

LUV stock reached 52-week highs at $63.18, and all-time highs 2017-12-21 with a price of 65.59.

LUV stock price target is $56.20

Predicting the price evolution of a stock or any financial instrument in a reliable and repeatable way is probably impossible. However, many stock price predictions are published every day by banks, financial institutions and independent analysts. You should not follow the analysts' LUV stock price predictions in the hope that they will be met as they may be wrong and not met. We found 11 price forecasts for Southwest Airlines stock published in the last 30 days:
LUV stock price predictions
DateAnalyst / BrokerActionPrevious targetCurrent targetDiff
2019-9-6Berenberg BankInitiatesn/a$57.00-
2019-8-16Wolfe ResearchUpgradesn/a$57.00-
2019-8-14Morgan StanleyLowers Target$64.00$59.00-7.8%
2019-7-26CowenReiterates$55.00$57.003.6%
2019-7-26CowenRaises Target$55.00$57.003.6%
2019-5-20Morgan StanleyLowers Target$68.00$64.00-5.9%
2019-4-26BarclaysLowers Target$65.00$60.00-7.7%
2019-3-28Imperial CapitalLowers Target$55.00$52.00-5.5%
2019-3-28Credit Suisse GroupReiterates$56.00$50.00-10.7%
2019-3-28Credit Suisse GroupLowers Target$56.00$50.00-10.7%
2019-3-27CowenLowers Target$58.00$55.00-5.2%
(in average)$59.10$56.20-5.0%
The price prediction for Southwest Airlines stock is $56.20, moving in a range between $64.00 and $50.00. In average, analysts' outlook on LUV price target is negative, downsizing the forecast by a -5.00% from previous estimations.

Financials and fundamental analysis

Earnings date and Earnings per Share

Since April, when Southwest Airlines published its last earnings report, it . As soon as we get its actual EPS from the earnings report, we will update this review.
LUV earnings date and EPS evolution
QuarterReporting dateEstimated EPSActual EPSSurprise
2017-Q2-n/a1.23n/a
2017-Q32017-10-260.870.881.1%
2017-Q42018-01-250.770.770.0%
2018-Q12018-04-260.750.750.0%
2018-Q22018-07-261.251.260.8%
2018-Q32018-10-251.061.081.9%
2018-Q42019-01-241.061.1710.4%
2019-Q12019-04-250.89n/an/a
2019-Q2-n/an/an/a
2019-Q3-n/an/an/a

Annual financial results

In 2018, Southwest Airlines annual revenues gained a decent 3.87% to $21,965.00 M USD from $21,146.00 marked in 2017. When comparing 2018 vs 2017, nevertheless, profit margin (that is, the net income divided by revenues) decreased a -4.65% to 11.22%.

To have an up to date picture of the financial situation of Southwest Airlines, we have calculated the trailing twelve month (TTM) sales and income figures. TTM values are the sum of the last 4 quarters and aproximate to an annual fiscal report ending in 2019-Q1 that can be compared to 2018 fiscal year results. Annual Southwest Airlines TTM sales up to March 2019 were $22,170.00 and earnings were $2,389.00 million dollars. If we compare this TTM figures with the last reported annuality, we can esteem Southwest Airlines business evolution since December 2018: Annual turnover up to March, compared to lastest yearly report, remained stable a slightly fine 0.93%. In the same way, profit margin (net income/sales) stayed stable at 11.22%.

LUV annual Sales and Income evolution
YearSalesYoYIncome/(margin)YoY
2013$17,700 M-$757 M4.3%-
2014$18,605 M5.11%$1,136 M6.1%50.07%
2015$19,820 M6.53%$2,181 M11.0%91.99%
2016$20,425 M3.05%$2,244 M11.0%2.89%
2017$21,146 M3.53%$3,357 M15.9%49.60%
2018$21,965 M3.87%$2,465 M11.2%-26.57%
TTM $22,170 M0.93%$2,389 M10.8%-3.08%

Quarterly financial results

Southwest Airlines reported $5,149.00 million in sales for 2019-Q1, a -9.73% decline compared to previous quarter. Reported quarter earnings marked $387.00 million with a profit margin of 7.52%. Profit margin depreciated a -3.95% compared to previous quarter when profit margin was 11.47%. When comparing turnover to same quarter last year, Southwest Airlines sales marked a fine increase and appreciated a 4.15%.
LUV quarterly Sales and Income evolution
QuarterSales1QoQ2Income1/(margin)QoQ2
2017-Q2$5,740 M-$746 M13.0%-
2017-Q3$5,270 M-8.19%$503 M9.5%-32.57%
2017-Q4$5,283 M0.25%$1,878 M35.5%273.36%
2018-Q1$4,944 M-6.42%$463 M9.4%-75.35%
2018-Q2$5,742 M16.14%$733 M12.8%58.32%
2018-Q3$5,575 M-2.91%$615 M11.0%-16.10%
2018-Q4$5,704 M2.31%$654 M11.5%6.34%
2019-Q1$5,149 M-9.73%$387 M7.5%-40.83%

Southwest Airlines ownership

When you are planning to invest in a company, it's worth to review its ownership structure.

Management staff in all public traded companies that hold equity is required to report every transaction to the SEC. For Southwest Airlines, 0.29% of all outstanding shares are owned by its staff.

Bearish positions for LUV stock account 0.00%, no big difference from last month.

For a better context understanding, the next table shows ownership data compared to other related stocks:

LUVAALALGTALKDAL
Market cap$29.3 B$12.6 B$2.5 B$8.0 B$38.1 B
Total shares537.5 M445.3 M16.3 M123.3 M650.2 M
Float shares481.9 M396.1 M11.4 M122.8 M574.5 M
  - Institutional holdings (%)81.9%7.8%81.5%89.7%0.0%
  - Insider holdings (%)0.3%39.8%20.8%0.4%49.6%
Shares in short selling0.0%0.0%0.0%0.0%0.0%

LUV summary

Friday, September 20th, 2019
Open$55.16
Close$54.49
Day range$54.27 - $55.43
Previous close$55.08
Session gain-1.07%
Average true range$1.25
50d mov avg$52.03
100d mov avg$51.58
200d mov avg$51.60
Daily patternlt06a
Weekly pattern lb02a

Southwest Airlines performance

Performance as an absolute value is never valid if it's not benchmarked against competitors or related stocks in the industry. We compared Southwest Airlines against American Airlines, Allegiant Travel, Alaska Air, Delta Air Lines, Hawaiian, JetBlue Airways, Spirit Airlines, SkyWest and United Continental in the following table:
Stock3m6m12m
LUVSouthwest Airline...6.70%11.29%-13.41%
AALAmerican Airlines-10.04%-6.85%-34.32%
ALGTAllegiant Travel12.08%24.57%19.26%
ALKAlaska Air5.31%21.20%-5.23%
DALDelta Air Lines5.41%19.31%0.93%
HAHawaiian4.93%10.59%-32.06%
JBLUJetBlue Airways-8.98%6.21%-14.93%
SAVESpirit Airlines-20.34%-28.31%-21.25%
SKYWSkyWest2.42%15.28%1.49%
UALUnited Continenta...2.73%11.88%-0.95%

Southwest Airlines competitors

We selected a few stocks to conform a list of Southwest Airlines competitors to examine if you are interested in investing in LUV:

Latest LUV stock news