AAL vs LUV Stock Comparison: AI Score, Valuation, Performance and Upside
American Airlines is typically evaluated as a leveraged, network-scale bet on premium and international travel recovery, while Southwest is judged on how successfully it can modernize its revenue model without eroding the brand loyalty built on simplicity and low fares. The choice between them often comes down to risk appetite for balance-sheet leverage versus turnaround execution risk.
Use this AAL vs LUV comparison to separate balance-sheet risk from operational turnaround risk: American offers network scale and premium revenue exposure against a heavier debt load, while Southwest offers a historically simpler model now undergoing a significant strategic reset.
LUV holds the edge across 3 of 5 key metrics in this comparison. LUV has delivered stronger 1-year price return (+17.11% vs +0.45%), though AAL has the better forward P/E setup (5.89x vs 8.15x for LUV). LUV leads on both revenue growth (16.40%) and operating margin (3.38%), suggesting a stronger fundamental setup on both dimensions. Analyst consensus implies meaningfully more upside for AAL (+35.63%) than for LUV (+29.44%).
- Want exposure to premium and international long-haul travel demand
- Believe loyalty and co-branded card revenue can keep growing steadily
- Are comfortable with a highly leveraged balance sheet
- Expect continued domestic industry capacity discipline to support fares
- Believe Southwest's new bag-fee and assigned-seating initiatives will close its revenue gap versus peers
- Want lower balance-sheet leverage than most network carriers
- See value in activist-driven cost and capital-allocation discipline
- Are willing to underwrite execution risk during a multi-year strategy shift
| Metric | AAL | LUV |
|---|---|---|
| AI score | 26.7 | 38.6 |
| AI rank | #2479 | #1199 |
| Latest close | $13.43 | $38.53 |
| 1M return | -12.05% | -14.32% |
| 6M return | +7.27% | -20.18% |
| 1Y return | +0.45% | +17.11% |
How much would $10,000 be worth today if invested at the start of each period, with all dividends reinvested?
| Period | AAL | LUV |
|---|---|---|
| 1Y ago | $10.03K (+0.3%) started 2025-09-02 | $11.95K (+19.5%) started 2025-09-02 |
| 5Y ago | $6.84K (-31.6%) started 2021-09-01 | $8.72K (-12.8%) started 2021-09-01 |
| 10Y ago | $3.71K (-62.9%) started 2016-09-01 | $12.79K (+27.9%) started 2016-09-01 |
Hypothetical — past performance does not guarantee future results.
| Metric | AAL | LUV |
|---|---|---|
| Market cap | $9.03B | $19.39B |
| Trailing P/E | 48.32 | 24.77 |
| Forward P/E | 5.89 | 8.15 |
| Price/Sales | N/A | N/A |
| EV/Revenue | 0.62 | 0.75 |
| Analyst target | $18.50 | $51.31 |
| Target upside | +35.63% | +29.44% |
| Metric | AAL | LUV |
|---|---|---|
| Revenue growth | 16.30% | 16.40% |
| Earnings growth | -88.20% | 20.50% |
| EPS growth | -88.20% | +20.50% |
| FCF margin | +0.89% | -2.78% |
| Operating margin | 2.81% | 3.38% |
| Profit margin | -0.56% | 2.78% |
| ROIC proxy | N/A | 11.10% |
| Return on equity | N/A | 11.10% |
| Dividend yield | N/A | 1.82% |
| Beta | 1.35 | 1.14 |
| Debt/equity | N/A | 97.28 |
| Current ratio | 0.53 | 0.49 |
| Quick ratio | 0.38 | 0.38 |
Lower drawdown and smaller single-period drops generally indicate a smoother ride, though they do not guarantee lower future risk.
| Period | Metric | AAL | LUV |
|---|---|---|---|
| 1Y | Growth | +0.30% | +19.47% |
| CAGR | +0.30% | +19.60% | |
| Sharpe ratio | 0.15 | 0.52 | |
| Max drawdown | 37.39% | 33.78% | |
| Max daily drop | 8.32% | 7.74% | |
| Max wkly drop | 15.42% | 15.63% | |
| 5Y | Growth | -31.62% | -17.72% |
| CAGR | -7.32% | -3.83% | |
| Sharpe ratio | -0.01 | -0.03 | |
| Max drawdown | 59.25% | 58.75% | |
| Max daily drop | 14.48% | 14.86% | |
| Max wkly drop | 25.57% | 22.98% | |
| 10Y | Growth | -62.94% | +15.79% |
| CAGR | -9.45% | +1.48% | |
| Sharpe ratio | -0.01 | 0.11 | |
| Max drawdown | 84.54% | 64.76% | |
| Max daily drop | 25.22% | 15.11% | |
| Max wkly drop | 35.76% | 23.60% |
| Category | AAL | LUV |
|---|---|---|
| Company | American Airlines Group Inc. | Southwest Airlines Co. |
| Sector | Industrials | Industrials |
| Industry | N/A | N/A |
| Core business | American Airlines operates the largest hub-and-spoke domestic and international network in the U.S., anchored by major hubs in Dallas-Fort Worth, Charlotte, and Chicago. | Southwest Airlines runs a point-to-point domestic network built on a single Boeing 737 fleet type, historically differentiated by no bag fees and open seating. |
| Investor focus | Investors watch American's heavy debt load from the US Airways merger and pandemic-era borrowing, premium cabin and loyalty program revenue growth, and fuel cost trends. | Investors are focused on Southwest's transition away from its legacy open-seating model, new revenue initiatives like bag fees and assigned/extra-legroom seating, and cost discipline under activist investor pressure. |
- Largest global route network and hub density among U.S. carriers
- Strong co-branded credit card and loyalty (AAdvantage) revenue stream
- Premium and international long-haul demand supporting revenue per seat
- Simplified single-fleet-type operating model keeps maintenance and training costs lower
- Historically strong brand loyalty and domestic leisure travel exposure
- New assigned-seating, extra-legroom, and bag-fee revenue initiatives targeting a long-standing revenue gap versus peers
- Elevated net debt and interest expense relative to peers
- Sensitivity to fuel prices and macro-driven travel demand swings
- Ongoing competition from low-cost carriers on domestic routes
- Execution risk in overhauling decades-old customer policies and revenue systems
- Activist investor involvement (Elliott Management) driving board and strategy changes
- Domestic leisure concentration leaves it exposed to consumer spending pullbacks
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