Would You Still Hold Southwest Airlines Stock If It Fell 30%?
Southwest Airlines (LUV) stock is up 28.7% in 21 trading days. The rally reflects renewed optimism around Southwest’s strategic reset and analyst upgrades, but big moves often invite a tougher question: is LUV truly resilient when markets reverse?
Before judging its downturn reslience, let’s look at where Southwest Airlines stands today.
- Size: Southwest Airlines is a $21 Bil company with $28 Bil in revenue currently trading at $40.98.
- Fundamentals: Last 12 month revenue growth of 0.6% and operating margin of 1.1%.
- Liquidity: Has Debt to Equity ratio of 0.32 and Cash to Assets ratio of 0.11
- Valuation: Southwest Airlines stock is currently trading at P/E multiple of 44.0 and P/EBIT multiple of 27.1
- Has returned (median) 41.6% within a year following sharp dips since 2010. See LUV Dip Buy Analysis.
These metrics point to a Weak operational performance, alongside High valuation – making the stock Unattractive. For details, see Buy or Sell LUV Stock
That brings us to the key consideration for investors chasing this rally: how resilient is LUV stock if markets turn south? This is where our downturn resilience framework comes in. Suppose LUV stock falls 20-30% to $29 – can investors comfortably hold on? Turns out, the stock has fared much worse than the S&P 500 index during various economic downturns, based on (a) how much the stock fell and, (b) how quickly it recovered. Below, we dive deeper into each such downturn.
- LUV Lost 19% In A Month. Do You Buy Or Wait?
- Is The 21% Drop In LUV Stock, A Buying Opportunity?
- After A 21% Slide, Is LUV Stock Worth A Look?
- LUV Stock Down -18% after 5-Day Loss Streak
- LUV Lost 12% In A Week. Past Slides Turned Into Crashes.
- S&P 500 Movers | Winners: UAL, DAL, LUV | Losers: AXON, PTC, FTNT
2022 Inflation Shock
- LUV stock fell 65.3% from a high of $64.10 on 6 April 2021 to $22.23 on 31 October 2023 vs. a peak-to-trough decline of 25.4% for the S&P 500.
- The stock is yet to recover to its pre-Crisis high
- The highest the stock has reached since then is $42.17 on 16 December 2025 , and currently trades at $40.98
| LUV | S&P 500 | |
|---|---|---|
| % Change from Pre-Recession Peak | -65.3% | -25.4% |
| Time to Full Recovery | Not Fully Recovered | 464 days |
2020 Covid Pandemic
- LUV stock fell 59.2% from a high of $58.54 on 13 February 2020 to $23.87 on 15 May 2020 vs. a peak-to-trough decline of 33.9% for the S&P 500.
- However, the stock fully recovered to its pre-Crisis peak by 24 February 2021
| LUV | S&P 500 | |
|---|---|---|
| % Change from Pre-Recession Peak | -59.2% | -33.9% |
| Time to Full Recovery | 285 days | 148 days |
2018 Correction
- LUV stock fell 33.0% from a high of $66.29 on 2 January 2018 to $44.40 on 24 December 2018 vs. a peak-to-trough decline of 19.8% for the S&P 500.
- The stock is yet to recover to its pre-Crisis high
| LUV | S&P 500 | |
|---|---|---|
| % Change from Pre-Recession Peak | -33.0% | -19.8% |
| Time to Full Recovery | Not Fully Recovered | 120 days |
2008 Global Financial Crisis
- LUV stock fell 69.8% from a high of $16.60 on 8 August 2007 to $5.01 on 5 March 2009 vs. a peak-to-trough decline of 56.8% for the S&P 500.
- However, the stock fully recovered to its pre-Crisis peak by 24 October 2013
| LUV | S&P 500 | |
|---|---|---|
| % Change from Pre-Recession Peak | -69.8% | -56.8% |
| Time to Full Recovery | 1,694 days | 1,480 days |
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