Southwest Airlines Valuation
Is LUV * undervalued compared to its fair value, analyst forecasts and its price relative to the market?
Valuation Score
4/6Valuation Score 4/6
Below Fair Value
Significantly Below Fair Value
Price-To-Sales vs Peers
Price-To-Sales vs Industry
Price-To-Sales vs Fair Ratio
Analyst Forecast
Share Price vs Fair Value
What is the Fair Price of LUV * when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.
Below Fair Value: LUV * (MX$640) is trading below our estimate of fair value (MX$3734.6)
Significantly Below Fair Value: LUV * is trading below fair value by more than 20%.
Key Valuation Metric
Which metric is best to use when looking at relative valuation for LUV *?
Key metric: As LUV * is unprofitable we use its Price-To-Sales Ratio for relative valuation analysis.
What is LUV *'s PS Ratio? | |
---|---|
PS Ratio | 0.7x |
Sales | US$27.38b |
Market Cap | US$19.17b |
Key Statistics | |
---|---|
Enterprise Value/Revenue | 0.7x |
Enterprise Value/EBITDA | 11.2x |
PEG Ratio | n/a |
Price to Sales Ratio vs Peers
How does LUV *'s PS Ratio compare to its peers?
Company | Forward PS | Estimated Growth | Market Cap |
---|---|---|---|
Peer Average | 4.2x | ||
VOLAR A Controladora Vuela Compañía de Aviación. de | 0.3x | 5.3% | Mex$18.4b |
AEROMEX * Grupo Aeroméxico. de | 0.3x | n/a | Mex$22.8b |
GAP B Grupo Aeroportuario del Pacífico. de | 7.7x | 17.7% | Mex$194.0b |
ALEATIC * Aleatica. de | 8.7x | n/a | Mex$157.8b |
LUV * Southwest Airlines | 0.7x | 4.4% | Mex$19.2b |
Price-To-Sales vs Peers: LUV * is good value based on its Price-To-Sales Ratio (0.7x) compared to the peer average (5.5x).
Price to Sales Ratio vs Industry
How does LUV *'s PS Ratio compare vs other companies in the Global Airlines Industry?
18 Companies | Price / Sales | Estimated Growth | Market Cap |
---|---|---|---|
18 Companies | Estimated Growth | Market Cap | |
---|---|---|---|
Price-To-Sales vs Industry: LUV * is expensive based on its Price-To-Sales Ratio (0.7x) compared to the Global Airlines industry average (0.6x).
Price to Sales Ratio vs Fair Ratio
What is LUV *'s PS Ratio compared to its Fair PS Ratio? This is the expected PS Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.
Fair Ratio | |
---|---|
Current PS Ratio | 0.7x |
Fair PS Ratio | 1.1x |
Price-To-Sales vs Fair Ratio: LUV * is good value based on its Price-To-Sales Ratio (0.7x) compared to the estimated Fair Price-To-Sales Ratio (1.1x).
Analyst Price Targets
What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?
Date | Share Price | Average 1Y Price Target | Dispersion | High | Low | 1Y Actual price | Analysts |
---|---|---|---|---|---|---|---|
Current | Mex$640.00 | Mex$606.74 -5.2% | 16.1% | Mex$795.16 | Mex$387.38 | n/a | 19 |
Nov ’25 | Mex$622.00 | Mex$593.91 -4.5% | 16.8% | Mex$780.62 | Mex$380.30 | n/a | 17 |
Oct ’25 | Mex$584.00 | Mex$520.19 -10.9% | 19.2% | Mex$689.08 | Mex$374.07 | n/a | 17 |
Sep ’25 | Mex$568.00 | Mex$491.47 -13.5% | 17.1% | Mex$640.66 | Mex$368.86 | n/a | 16 |
Aug ’25 | Mex$490.00 | Mex$473.76 -3.3% | 17.0% | Mex$614.53 | Mex$353.82 | n/a | 16 |
Jul ’25 | Mex$529.19 | Mex$484.41 -8.5% | 16.8% | Mex$679.87 | Mex$349.12 | n/a | 16 |
Jun ’25 | Mex$455.79 | Mex$452.52 -0.7% | 18.6% | Mex$637.80 | Mex$318.90 | n/a | 18 |
May ’25 | Mex$450.02 | Mex$460.67 +2.4% | 18.5% | Mex$646.76 | Mex$323.38 | n/a | 18 |
Apr ’25 | Mex$486.16 | Mex$499.27 +2.7% | 19.5% | Mex$701.80 | Mex$317.48 | n/a | 19 |
Mar ’25 | Mex$578.09 | Mex$504.41 -12.7% | 21.8% | Mex$716.61 | Mex$324.18 | n/a | 19 |
Feb ’25 | Mex$511.37 | Mex$480.53 -6.0% | 23.1% | Mex$686.35 | Mex$257.38 | n/a | 19 |
Jan ’25 | Mex$499.98 | Mex$455.49 -8.9% | 26.6% | Mex$806.89 | Mex$309.02 | n/a | 19 |
Dec ’24 | Mex$456.35 | Mex$453.24 -0.7% | 26.6% | Mex$804.50 | Mex$308.11 | n/a | 19 |
Nov ’24 | Mex$396.00 | Mex$501.56 +26.7% | 25.2% | Mex$837.18 | Mex$320.62 | Mex$622.00 | 19 |
Oct ’24 | Mex$475.00 | Mex$593.34 +24.9% | 21.6% | Mex$958.71 | Mex$348.62 | Mex$584.00 | 19 |
Sep ’24 | Mex$534.00 | Mex$608.98 +14.0% | 18.9% | Mex$923.64 | Mex$419.84 | Mex$568.00 | 19 |
Aug ’24 | Mex$557.00 | Mex$640.19 +14.9% | 15.2% | Mex$920.94 | Mex$502.33 | Mex$490.00 | 18 |
Jul ’24 | Mex$615.00 | Mex$701.50 +14.1% | 17.4% | Mex$1,027.84 | Mex$548.18 | Mex$529.19 | 18 |
Jun ’24 | Mex$514.54 | Mex$710.04 +38.0% | 18.2% | Mex$1,105.86 | Mex$561.71 | Mex$455.79 | 18 |
May ’24 | Mex$544.00 | Mex$765.34 +40.7% | 22.3% | Mex$1,150.71 | Mex$575.36 | Mex$450.02 | 18 |
Apr ’24 | Mex$583.99 | Mex$810.64 +38.8% | 20.3% | Mex$1,158.34 | Mex$579.17 | Mex$486.16 | 18 |
Mar ’24 | Mex$609.50 | Mex$849.60 +39.4% | 17.8% | Mex$1,189.24 | Mex$650.36 | Mex$578.09 | 18 |
Feb ’24 | Mex$672.00 | Mex$862.34 +28.3% | 17.4% | Mex$1,201.23 | Mex$656.92 | Mex$511.37 | 18 |
Jan ’24 | Mex$650.00 | Mex$978.87 +50.6% | 17.0% | Mex$1,346.22 | Mex$772.10 | Mex$499.98 | 18 |
Dec ’23 | Mex$757.00 | Mex$956.66 +26.4% | 16.9% | Mex$1,264.28 | Mex$747.07 | Mex$456.35 | 17 |
Nov ’23 | Mex$720.00 | Mex$969.76 +34.7% | 18.0% | Mex$1,301.51 | Mex$769.08 | Mex$396.00 | 17 |
Analyst Forecast: Target price is lower than the current share price.