What Is LUV Fair Value?
Southwest Airlines (LUV) fair value estimate using multiple valuation models, updated daily.
As of October 14, 2026, Southwest Airlines (LUV) has a composite fair value estimate of $71.93 based on four valuation models: DCF (41% weight), Graham Number (29% weight), PEG (29% weight), and DDM (0% weight). The current market price is $39.34, suggesting the stock is undervalued by 82.8%.
Data as of October 14, 2026 (today)
Composite Fair Value
Undervalued3 of 4 models$71.93
vs. current price of $39.34(+82.8%)
How Is LUV Fair Value Calculated?
Four independent models estimate what LUV is worth. Each uses different inputs and assumptions. The composite blends them by weight.
LUV Intrinsic Value
Forward-looking models based on future cash flows
DCF (Discounted Cash Flow)
41% weightEstimates how much cash the company will generate over the next 10 years, then calculates what all that future cash is worth in today's dollars. Includes a 15% safety cushion. Try the standalone DCF calculator →
$43.13
+9.6%Fair Value
Inputs used
DDM (Dividend Discount Model)
0% weightIf a company pays you dividends, this model asks: how much are all those future dividend payments worth today? Only works for stocks that pay dividends. Try the intrinsic value calculator →
N/A
This stock does not pay a dividend, so the DDM cannot be applied. The composite adjusts by redistributing this weight to the other models.
LUV Fair Value
Current fundamentals: earnings, assets, and growth rate
Graham Number (Value Investing)
29% weightCreated by legendary investor Benjamin Graham. It looks at two things: how much the company earns (EPS) and what its assets are worth (Book Value), then calculates the maximum price a careful investor should pay. Try the fair value calculator →
$30.52
-22.4%Overvalued
Inputs used
PEG (Price/Earnings to Growth)
29% weightChecks if you're paying a fair price for the company's growth. A fast-growing company deserves a higher price than a slow one. This model finds the right price based on how fast earnings are growing.
$143.00
+263.5%Undervalued
Inputs used
What If You Change the Assumptions?
Drag the sliders to test different scenarios. Tap the ? buttons to learn what each input means.
Your DCF Fair Value
Current price $39.34 is 9.6% below this estimate
View 10-year cash flow projections
| Year | Projected FCF (Free Cash Flow) | Present Value |
|---|---|---|
| Year 1 | $413.4M | $379.2M |
| Year 2 | $516.8M | $434.7M |
| Year 3 | $646.0M | $498.4M |
| Year 4 | $807.5M | $571.4M |
| Year 5 | $1.01B | $655.0M |
| Year 6 | $1.26B | $751.0M |
| Year 7 | $1.58B | $860.9M |
| Year 8 | $1.97B | $987.0M |
| Year 9 | $2.46B | $1.13B |
| Year 10 | $3.08B | $1.30B |
| Terminal Value | $48.33B | $20.35B |
What Are LUV's Key Financial Metrics?
Earnings & Growth
Current Price
$39.34
EPS (TTM)
$1.60
Forward P/E
9.1
Profit Margin
2.8%
Cash & Balance Sheet
Free Cash Flow
-834.8M
EBITDA
2.3B
Book Value
$14.48
Total Debt
6.9B
What Do Analysts Say About LUV?
Low
$34.00
Average
$49.22
High
$65.00
Upside
+25.1%
LUV Fair Value FAQ
What is the fair value of LUV?
Based on our composite model (DCF 35%, Graham 25%, PEG 25%, DDM 15%), LUV's estimated fair value is $71.93. The stock is currently trading at $39.34, which makes it undervalued by our analysis.
How is LUV's fair value calculated?
We use four valuation methods: Discounted Cash Flow (DCF), Graham Number, PEG-based Fair Value, and Dividend Discount Model (for dividend-paying stocks). The composite score weights DCF at 35%, Graham and PEG at 25% each, and DDM at 15%. When a model can't be applied, its weight is redistributed proportionally.
Is LUV overvalued or undervalued?
Based on our analysis, LUV is undervalued. The current price of $39.34 is 82.8% below our estimated fair value of $71.93.
What do Wall Street analysts say about LUV?
23 analysts cover Southwest Airlines with a consensus rating of "Buy." The average price target is $49.22, ranging from $34.00 to $65.00. This implies 25.1% upside from the current price.