Southwest Airlines Stock To $28?
Southwest Airlines (LUV) stock has fallen by 24.0% in less than a month, from $54.80 on 18th Feb, 2026 to $41.67 now. What comes next? We think that the stock could fall even more. The current correction, when put in context of our Unattractive opinion of the stock, suggest possibility of further downside. A price of $28 is not out of question, especially considering that the stock has seen this level in the last 5 years. Read Buy or Sell Southwest Airlines Stock to see how we arrive at this opinion.
So should you wait before buying this dip? Perhaps. There is no perfect way to time the dips. Nevertheless, here is another perspective on LUV stock to help you make the decision. Historically, the median return for the 12-month period following sharp dips was 15%, with median peak return reaching 32%. We define sharp dip as stock going down 20% or more, in less than 30 day period.
Below, we get into details of historical dips and subsequent returns.
Historical Median Returns Post Dips
- 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
- Southwest Airlines Stock To $36?
- LTM Looks Smarter Buy Than Southwest Airlines Stock
| Period | Past Median Return |
|---|---|
| 1M | 6.4% |
| 3M | 11.8% |
| 6M | 8.4% |
| 12M | 14.5% |
Historical Dip-Wise Details
LUV had 10 events since 1/1/2010 where the dip threshold of -20% within 30 days was triggered
- 32% median peak return within 1 year of dip event
- 146 days is the median time to peak return after a dip event
- -13% median max drawdown within 1 year of dip event
| 30 Day Dip | LUV Subsequent Performance | |||||||
|---|---|---|---|---|---|---|---|---|
| Date | LUV | SPY | 1Y | Peak Return |
Max Drop |
# Days to Peak |
||
| Median | 15% | 32% | -13% | 146 | ||||
| 10272023 | -25% | -7% | 42% | 58% | -0% | 132 | ||
| 9262023 | -20% | -5% | 15% | 33% | -16% | 163 | ||
| 9262022 | -21% | -14% | -13% | 31% | -13% | 66 | ||
| 6142022 | -20% | -10% | -8% | 13% | -23% | 36 | ||
| 12162021 | -20% | 0% | -6% | 22% | -22% | 126 | ||
| 3092020 | -23% | -17% | 35% | 39% | -45% | 364 | ||
| 10262018 | -21% | -8% | 17% | 18% | -10% | 101 | ||
| 1202016 | -20% | -11% | 29% | 33% | -12% | 357 | ||
| 6292015 | -21% | -3% | 14% | 50% | -2% | 161 | ||
| 8052011 | -26% | -6% | 10% | 21% | -13% | 182 | ||
Southwest Airlines Passes Basic Financial Quality Checks
Revenue growth, profitability, cash flow, and balance sheet strength need to be evaluated to reduce the risk of a dip being the sign of a deteriorating business situation.
| Quality Metrics | Value | Quality Check |
|---|---|---|
| Revenue Growth (LTM) | 2.1% | Pass |
| Revenue Growth (3-Yr Avg) | 5.7% | Pass |
| Operating Cash Flow Margin (LTM) | 6.6% | Pass |
| Leverage (see below) | – | Pass |
| => Interest Coverage Ratio | 5.9 | |
| => Cash To Interest Expense Ratio | 28.3 |
Not sure if you can take a call on LUV stock? Consider portfolio approach
Portfolios Win When Stock Picks Fall Short
Stocks can jump or crash but long term success comes from staying invested. The right portfolio helps you ride gains and cushion single stock drops.
The 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? HQ Portfolio has posted more than 105% in cumulative return since inception, with less risk versus the benchmark index, as evident in HQ Portfolio performance metrics.