Southwest Airlines (LUV) Posted Strong Q2 Results, Is The Stock Still Cheap?

Southwest Airlines (LUV) recently reported strong Q2 2026 results with revenues of US$8.432 billion and net income of US$233 million, yet its stock has seen a recent pullback despite stronger long-term performance. The company is considered undervalued with a narrative fair value of US$47.51 against its current price of US$44.38, driven by potential revenue enhancements through differentiated seating strategies. However, the investment carries execution risks due to uncertain demand, competition, and potential Boeing delivery issues.