LUV Forecast



Bearish<—>Bullish



80% Confidence




Bullish Case: Recent restructuring efforts and rising demand in peak travel seasons may offer a rebound. LUV could capitalize on operational improvements and new market opportunities.




Bearish Case: Operational and regulatory challenges continue to pose risks. Legal issues and public relations mishaps can hinder a recovery, impacting the stock negatively.




Potential Outcomes:
  1. 50% chance of gradual recovery from restructuring benefits.
  2. 30% risk of further depreciation due to regulatory and operational issues.
  3. 20% potential for minor gains from strategic market expansions.




Trading Oracle: Implement a short-term neutral volatility strategy with a straddle on LUV, centered around the $30 strike. Implied volatilities indicate potential movements both upward from restructuring benefits and downward due to persisting challenges. Expiry target: April 2025 for capturing near-term volatility shifts.



February 25, 2025


Southwest Airlines Forecast

LUV        Southwest Airlines











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