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Analysis of Southwest Airlines (LUV) Ahead of Q4 Earnings

Southwest Airlines $LUV  are reporting earnings before open on Thursday (1/21). With the low oil prices comes a lot of interest in the airline industry. Here is a quick fundamental and technical analysis on the company a week prior to earnings.

Fundamental Analysis

SprinkleBit offers an analyzer that run the numbers for you. The companies and analyzing metrics are both crowdsourced, but in this case we switched United for Spirit Airlines $SAVE, as they are closer competitors.

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Based on Ebitda multiple, P/E and PEG Southwest Airlines $LUV is overvalued compared to its peers. The analyzer crunched the numbers and we received an implied share price of $32.42. These numbers imply that Southwest Airlines is currently overvalued with 19.85% .

Technical Analysis

Fundamental analysis tells you what the company is worth, where as technical analysis shows where the market priced it at.

This technical analysis shows that on an earnings miss, the stock can fall to $37. If Southwest $LUV beat earnings, the stock has the potential to rise to $43. Based on the trend this shows a possible 9.3% downside and a 6.3% upside.

 

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I am a swing/momentum stock and options trader, and trade mostly tech and consumer trend stocks. I am an entrepreneur and DYI investor seeking financial wealth on my own premises.

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