- Southwest Airlines (NYSE: LUV) and Delta Airlines (NYSE: DAL) are major airlines operating in the USA. However, they have different strategies, business models, and operating environments.
- It is vital to compare LUV vs. DAL stock price prediction to understand better how each company performs against its competitors and what investors can expect from them over time.
- This article compares these two stocks based on their financial metrics and historical performance over time to find out which stock has profitable returns.
What is Southwest Airlines (NYSE: LUV)?
Southwest Airlines (NYSE: LUV) is a major airline based in Dallas, Texas, in the United States. The carrier operates a fleet of over 700 Boeing 737 aircraft and flies to over 100 destinations across the United States, Mexico, Central America, and the Caribbean. In total, Southwest Airlines accounts for more than 55 million passengers per year. Southwest Airlines has been operating since 1971, when it was known as Air Southwest Company.
Southwest Airlines is currently the largest domestic airline in the United States by the number of passengers flown yearly. However, American Airlines (NASDAQ: AAL) has a larger market share because it operates international flights, while Southwest mainly serves domestic routes.
What is Delta Airlines (NYSE: DAL)?
Delta Air Lines is a major airline that operates more than 877 aircraft. The company was founded by C.E. Woolman, who opened its first flight in 1925 between Monroe, Louisiana, and Dallas, Texas. Delta Air Lines has since expanded its operations through acquisitions and mergers with other airlines such as Comair and Northwest Airlines.
The company's headquarters is based in Atlanta, Georgia, but before that, it was based out of New York City for many years. The airline currently operates a fleet of more than 870 aircraft from hubs across the country, including Ronald Reagan Washington National Airport (DCA).
LUV vs. DAL Stock Analysis
When you invest in LUV or DAL stock, you buy a piece of the company. So, it's your responsibility to understand what you're investing in and why you're making that decision.
It's important to consider how each investment is performing against other assets like it. We do this by comparing the stock's performance over time with other similar stocks and against benchmarks like the overall market or benchmark index (S&P 500). By doing this analysis, we can get an idea about how well our investment might perform over time relative to its peers and competitors.
LUV and DAL Stock Return Compared In the Past 5 Years
The stock prices of LUV and DAL have both increased over the past five years, but LUV has performed better than DAL. The chart below shows the company's annual percentage return in the past five years.
LUV's share price shows a negative return of %29.9% in the last five years, while DAL's shares have a negative return of %34. However, compared to other airlines, these gains are much better than those of United Airlines (UAL) and American Airlines (AAL)
LUV's Stock Price Prediction By 2025
Southwest stock is expected to grow at a CAGR of 6.9% over the next five years. That's not as fast as it has been in recent years (from 2018-2022, Southwest has grown at an average annual rate of 7%). But it's still impressive.
Southwest Airlines is expected to reach a price of $35.67 in Dec 2022, possible monthly volatility of 7.747%. The pessimistic target level is projected at $33.57. In contrast, the optimistic target level is $36.39.
In 2023, the average target price per Southwest Airlines share is $48.98.
The pessimistic target level is $47.23, and the optimistic target is $49.81.
The average target price per Southwest Airlines share in Dec 2024 is $41.38. The pessimistic target level is $39.63, while the optimistic target is $43.32.
In 2025, LUV stock is forecasted to reach a price of $42.55. The pessimistic target level is $40.02, while the optimistic target is $43.27.
Analysts predict LUV stocks reaching a price of $47.40 in 2026.
What Are Analysts Saying about Delta Airlines' Outlook?
Investors can get a good read on how analysts feel about the future of an airline stock by looking at its price-to-earnings (PE) ratio. The PE ratio measures how expensive a stock is compared to its earnings per share (EPS).
Delta Airlines' stock prediction for Dec 2022 is $31.9269. In 2023, the DAL share price is expected to soar to $33.90by Dec. 2024 and also has a positive outlook for DAL stocks, with analysts predicting a price target of $36.67. The average target price per Delta Air Lines shares in Jun 2025 is $31.67. In 2026, DAL stocks will reach an optimistic price target of $40.41.
Is LUV or DAL a Good Buy Right Now?
If you're looking to invest in a company with a similar market cap, look no further than Southwest Airlines. LUV and DAL have similar stock prices ($40.89 and $31.96, respectively), but LUV has been outperforming its rival lately in terms of growth and profitability.
If you're still unsure about which airline stock to choose, consider how each company's business model aligns with your goals as an investor:
- Do you want to buy into an established brand? DAL's been around since 1925, while LUV started flying planes in 1971.
- Are safety concerns important? Both airlines have excellent safety records; Southwest has never crashed one of its planes, whereas Delta had three incidents between 2008-2017 (one fatal). This isn't enough evidence, but if it makes you feel more comfortable investing in Southwest over Delta, go right ahead!
Based on the information above, it looks like Southwest Airlines is a better buy than Delta Airlines right now. Both companies have been performing well in the past few years and are expected to continue. However, if you look at their stock returns over time for the past five years, then LUV has quite outperformed DAL. If you think that that trend will continue, buying LUV shares would be a good investment decision because they're more profitable than DAL's price today and provide greater long-term returns on investment!
Should you invest your hard earned money in LUV or DAL?
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