LUV Stock Falls -18% With A 6-day Losing Spree On Oil Price Shock
Southwest Airlines (LUV) – a passenger airline providing scheduled US and near-international flights – hit a 6-day losing streak, with cumulative losses over this period amounting to -18%. The company’s market cap has crashed by about $5.7 Bil over the last 6 days and currently stands at $25 Bil.
The stock has YTD (year-to-date) return of 0.6% compared to -1.5% for S&P 500. This calls for a re-evaluation of the stock’s valuation to find out whether this is an opportunity or a trap.
What Triggered The Slide?
[1] Surging Oil Prices From Geopolitical Conflict
- Better Value & Growth: LTM Leads Southwest Airlines Stock
- Southwest Airlines Stock To $28?
- Southwest Airlines Stock To $28?
- LTM Tops Southwest Airlines Stock on Price & Potential
- Would You Still Hold Southwest Airlines Stock If It Fell Another 30%?
- Stronger Bet Than Southwest Airlines Stock: LTM Delivers More
- Crude oil prices rose 12% in two days following an attack on Iran on Feb 28
- Analysts directly linked the stock’s slide to renewed oil price concerns
- Impact: Sector-wide airline stock decline, Increased investor concern over operating costs
[2] Rothschild & Co. ‘Sell’ Rating Reiteration
- Rothschild maintained its ‘Sell’ rating on LUV
- The action was reiterated despite a price target increase
- Impact: Reinforced negative institutional sentiment, Added to selling pressure during the streak
Opportunity or Trap?
Below is our take on valuation.
There are a few things to fear in LUV stock given its overall Weak operating performance and financial condition. In addition, keeping in mind its High valuation, we think that the stock is Unattractive (For details, see Buy or Sell LUV).
But here is the real interesting point.
You are reading about this -18% move after it happened. The market has already priced in the news. To avoid the next loser before the headlines, you need predictive signals, not notifications. Our High Quality Portfolio has a risk model designed to reduce exposure to losers.
Returns vs S&P 500
The following table summarizes the return for LUV stock vs. the S&P 500 index over different periods, including the current streak:
| Return Period | LUV | S&P 500 |
|---|---|---|
| 1D | -5.3% | -1.3% |
| 6D (Current Streak) | -18.4% | -2.4% |
| 1M (21D) | -21.0% | -2.1% |
| 3M (63D) | 17.0% | -1.6% |
| YTD 2026 | 0.6% | -1.5% |
| 2025 | 25.6% | 16.4% |
| 2024 | 19.1% | 23.3% |
| 2023 | -11.8% | 24.2% |
Take a look at what history tells you about whether past dips like this have been buying opportunities or traps: LUV Dip Buyer Analysis.
Gains and Losses Streaks: S&P 500 Constituents
There are currently 29 S&P constituents with 3 days or more of consecutive gains and 121 constituents with 3 days or more of consecutive losses.
| Consecutive Days | # of Gainers | # of Losers |
|---|---|---|
| 3D | 7 | 17 |
| 4D | 9 | 46 |
| 5D | 9 | 32 |
| 6D | 1 | 18 |
| 7D or more | 3 | 8 |
| Total >=3 D | 29 | 121 |
Key Financials for Southwest Airlines (LUV)
Last 2 Fiscal Years:
| Metric | FY2024 | FY2025 |
|---|---|---|
| Revenues | $27.5 Bil | $28.1 Bil |
| Operating Income | $321.0 Mil | $428.0 Mil |
| Net Income | $465.0 Mil | $441.0 Mil |
Last 2 Fiscal Quarters:
| Metric | 2025 FQ3 | 2025 FQ4 |
|---|---|---|
| Revenues | $6.9 Bil | $7.4 Bil |
| Operating Income | $35.0 Mil | $391.0 Mil |
| Net Income | $54.0 Mil | $323.0 Mil |
The losing streak LUV stock is currently on doesn’t inspire much confidence among investors. In contrast, Trefis High Quality (HQ) Portfolio, with a collection of 30 stocks, has a track record of comfortably outperforming its benchmark that includes all 3 — the S&P 500, S&P mid-cap, and Russell 2000 indices. Why is that? As a group, HQ Portfolio stocks provided better returns with less risk versus the benchmark index; less of a roller-coaster ride, as evident in HQ Portfolio performance metrics.