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LUV

Southwest Airlines NYSE:LUV Stock Report

Last Price

US$32.05

Market Cap

US$19.0b

7D

-7.7%

1Y

-39.4%

Updated

24 Sep, 2022

Data

Company Financials +
LUV fundamental analysis
Snowflake Score
Valuation4/6
Future Growth4/6
Past Performance1/6
Financial Health5/6
Dividends0/6

LUV Stock Overview

Southwest Airlines Co. operates as a passenger airline company that provide scheduled air transportation services in the United States and near-international markets.

Southwest Airlines Competitors

Price History & Performance

Summary of all time highs, changes and price drops for Southwest Airlines
Historical stock prices
Current Share PriceUS$32.05
52 Week HighUS$56.33
52 Week LowUS$31.57
Beta0.99
1 Month Change-16.86%
3 Month Change-15.05%
1 Year Change-39.36%
3 Year Change-41.02%
5 Year Change-42.75%
Change since IPO2,910.88%

Recent News & Updates

Sep 13
Estimating The Fair Value Of Southwest Airlines Co. (NYSE:LUV)

Estimating The Fair Value Of Southwest Airlines Co. (NYSE:LUV)

Does the September share price for Southwest Airlines Co. ( NYSE:LUV ) reflect what it's really worth? Today, we will...

Aug 29
The Returns On Capital At Southwest Airlines (NYSE:LUV) Don't Inspire Confidence

The Returns On Capital At Southwest Airlines (NYSE:LUV) Don't Inspire Confidence

What trends should we look for it we want to identify stocks that can multiply in value over the long term? In a...

Aug 19

Southwest Airlines to redeem $1.23B outstanding notes

Southwest Airlines (NYSE:LUV) said Friday it will redeem all outstanding 4.75% notes due 2023. The aggregate principal amount outstanding of the notes is $1.23B. The redemption price will be equal to the greater of 100% of the principal amount thereof and the make-whole redemption premium specified in the indenture, plus accrued and unpaid interest to the redemption date, or Aug. 31. LUV will fund the redemption with cash on hand.

Shareholder Returns

LUVUS AirlinesUS Market
7D-7.7%-9.5%-5.2%
1Y-39.4%-39.3%-23.0%

Return vs Industry: LUV matched the US Airlines industry which returned -39.3% over the past year.

Return vs Market: LUV underperformed the US Market which returned -23.1% over the past year.

Price Volatility

Is LUV's price volatile compared to industry and market?
LUV volatility
LUV Average Weekly Movement4.8%
Airlines Industry Average Movement6.7%
Market Average Movement6.9%
10% most volatile stocks in US Market15.8%
10% least volatile stocks in US Market2.8%

Stable Share Price: LUV is not significantly more volatile than the rest of US stocks over the past 3 months, typically moving +/- 5% a week.

Volatility Over Time: LUV's weekly volatility (5%) has been stable over the past year.

About the Company

FoundedEmployeesCEOWebsite
196762,333Bob Jordanhttps://www.southwest.com

Southwest Airlines Co. operates as a passenger airline company that provide scheduled air transportation services in the United States and near-international markets. As of December 31, 2021, the company operated a total fleet of 728 Boeing 737 aircrafts; and served 121 destinations in 42 states, the District of Columbia, and the Commonwealth of Puerto Rico, as well as 10 near-international countries, including Mexico, Jamaica, the Bahamas, Aruba, the Dominican Republic, Costa Rica, Belize, Cuba, the Cayman Islands, and Turks and Caicos. It also provides inflight entertainment and connectivity services on Wi-Fi enabled aircrafts; and Rapid Rewards loyalty program that enables program members to earn points for dollars spent on Southwest base fares.

Southwest Airlines Fundamentals Summary

How do Southwest Airlines's earnings and revenue compare to its market cap?
LUV fundamental statistics
Market CapUS$19.02b
Earnings (TTM)US$1.00b
Revenue (TTM)US$21.15b

18.9x

P/E Ratio

0.9x

P/S Ratio

Earnings & Revenue

Key profitability statistics from the latest earnings report
LUV income statement (TTM)
RevenueUS$21.15b
Cost of RevenueUS$16.04b
Gross ProfitUS$5.11b
Other ExpensesUS$4.11b
EarningsUS$1.00b

Last Reported Earnings

Jun 30, 2022

Next Earnings Date

Oct 27, 2022

Earnings per share (EPS)1.69
Gross Margin24.15%
Net Profit Margin4.75%
Debt/Equity Ratio94.8%

How did LUV perform over the long term?

See historical performance and comparison
We’ve recently updated our valuation analysis.

Valuation

Is LUV undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

4/6

Valuation Score 4/6

  • Price-To-Earnings vs Peers

  • Price-To-Earnings vs Industry

  • Price-To-Earnings vs Fair Ratio

  • Below Fair Value

  • Significantly Below Fair Value

  • Analyst Forecast

Key Valuation Metric

Which metric is best to use when looking at relative valuation for LUV?

Other financial metrics that can be useful for relative valuation.

LUV key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue0.7x
Enterprise Value/EBITDA6.2x
PEG Ratio0.8x

Price to Earnings Ratio vs Peers

How does LUV's PE Ratio compare to its peers?

LUV PE Ratio vs Peers
The above table shows the PE ratio for LUV vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
CompanyPEEstimated GrowthMarket Cap
Peer Average24.3x
DAL Delta Air Lines
30.9x34.4%US$18.5b
ALK Alaska Air Group
24.9x44.0%US$5.2b
CPA Copa Holdings
9.8x14.8%US$2.6b
ALGT Allegiant Travel
31.6x85.1%US$1.4b
LUV Southwest Airlines
18.9x24.8%US$19.0b

Price-To-Earnings vs Peers: LUV is good value based on its Price-To-Earnings Ratio (18.9x) compared to the peer average (24.3x).


Price to Earnings Ratio vs Industry

How does LUV's PE Ratio compare vs other companies in the Global Airlines Industry?

Price-To-Earnings vs Industry: LUV is expensive based on its Price-To-Earnings Ratio (18.9x) compared to the Global Airlines industry average (10x)


Price to Earnings Ratio vs Fair Ratio

What is LUV's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

LUV PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio18.9x
Fair PE Ratio23.9x

Price-To-Earnings vs Fair Ratio: LUV is good value based on its Price-To-Earnings Ratio (18.9x) compared to the estimated Fair Price-To-Earnings Ratio (23.9x).


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 ($32.05) is trading below our estimate of fair value ($49.06)

Significantly Below Fair Value: LUV is trading below fair value by more than 20%.


Analyst Price Targets

What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?

Analyst Forecast: Target price is more than 20% higher than the current share price, but analysts are not within a statistically confident range of agreement.


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Future Growth

How is Southwest Airlines forecast to perform in the next 1 to 3 years based on estimates from 18 analysts?

Future Growth Score

4/6

Future Growth Score 4/6

  • Earnings vs Savings Rate

  • Earnings vs Market

  • High Growth Earnings

  • Revenue vs Market

  • High Growth Revenue

  • Future ROE


24.8%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: LUV's forecast earnings growth (24.8% per year) is above the savings rate (1.9%).

Earnings vs Market: LUV's earnings (24.8% per year) are forecast to grow faster than the US market (14.7% per year).

High Growth Earnings: LUV's earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: LUV's revenue (6.2% per year) is forecast to grow slower than the US market (7.6% per year).

High Growth Revenue: LUV's revenue (6.2% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: LUV's Return on Equity is forecast to be high in 3 years time (21.7%)


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Past Performance

How has Southwest Airlines performed over the past 5 years?

Past Performance Score

1/6

Past Performance Score 1/6

  • Quality Earnings

  • Growing Profit Margin

  • Earnings Trend

  • Accelerating Growth

  • Earnings vs Industry

  • High ROE


-42.2%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: LUV has a large one-off gain of $380.0M impacting its June 30 2022 financial results.

Growing Profit Margin: LUV became profitable in the past.


Past Earnings Growth Analysis

Earnings Trend: LUV's earnings have declined by 42.2% per year over the past 5 years.

Accelerating Growth: LUV has become profitable in the last year, making the earnings growth rate difficult to compare to its 5-year average.

Earnings vs Industry: LUV has become profitable in the last year, making it difficult to compare its past year earnings growth to the Airlines industry (0.7%).


Return on Equity

High ROE: LUV's Return on Equity (9%) is considered low.


Discover strong past performing companies

Financial Health

How is Southwest Airlines's financial position?

Financial Health Score

5/6

Financial Health Score 5/6

  • Short Term Liabilities

  • Long Term Liabilities

  • Debt Level

  • Reducing Debt

  • Debt Coverage

  • Interest Coverage

Financial Position Analysis

Short Term Liabilities: LUV's short term assets ($19.4B) exceed its short term liabilities ($11.7B).

Long Term Liabilities: LUV's short term assets ($19.4B) exceed its long term liabilities ($15.5B).


Debt to Equity History and Analysis

Debt Level: LUV has more cash than its total debt.

Reducing Debt: LUV's debt to equity ratio has increased from 36.6% to 94.8% over the past 5 years.

Debt Coverage: LUV's debt is well covered by operating cash flow (25.1%).

Interest Coverage: LUV's interest payments on its debt are well covered by EBIT (3.6x coverage).


Balance Sheet


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Dividend

What is Southwest Airlines's current dividend yield, its reliability and sustainability?

Dividend Score

0/6

Dividend Score 0/6

  • Notable Dividend

  • High Dividend

  • Stable Dividend

  • Growing Dividend

  • Earnings Coverage

  • Cash Flow Coverage


1.07%

Forecast Dividend Yield

Dividend Yield vs Market

Notable Dividend: Unable to evaluate LUV's dividend yield against the bottom 25% of dividend payers, as the company has not reported any recent payouts.

High Dividend: Unable to evaluate LUV's dividend yield against the top 25% of dividend payers, as the company has not reported any recent payouts.


Stability and Growth of Payments

Stable Dividend: Insufficient data to determine if LUV's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if LUV's dividend payments have been increasing.


Earnings Payout to Shareholders

Earnings Coverage: LUV is not paying a notable dividend for the US market.


Cash Payout to Shareholders

Cash Flow Coverage: Unable to calculate sustainability of dividends as LUV has not reported any payouts.


Discover strong dividend paying companies

Management

How experienced are the management team and are they aligned to shareholders interests?

5.0yrs

Average management tenure


CEO

Bob Jordan (61 yo)

0.58yr

Tenure

US$3,049,336

Compensation

Mr. Robert E. Jordan, also known as Bob, has been the Chief Executive Officer and a Director of Southwest Airlines Co. since February 01, 2022. He served as an Executive Vice President of Corporate Service...


CEO Compensation Analysis

Compensation vs Market: Bob's total compensation ($USD3.05M) is below average for companies of similar size in the US market ($USD13.05M).

Compensation vs Earnings: Bob's compensation has been consistent with company performance over the past year.


Leadership Team

Experienced Management: LUV's management team is seasoned and experienced (5 years average tenure).


Board Members

Experienced Board: LUV's board of directors are seasoned and experienced ( 13.3 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

NYSE:LUV Recent Insider Transactions by Companies or Individuals
DateValueNameEntityRoleSharesMax Price
27 May 22SellUS$105,099John MontfordIndividual2,300US$45.70
09 Dec 21SellUS$23,697John MontfordIndividual540US$43.88
27 Oct 21SellUS$529,601Thomas GilliganIndividual11,188US$47.37

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Top 25 shareholders own 59.49% of the company
OwnershipNameSharesCurrent ValueChange %Portfolio %
10.82%
The Vanguard Group, Inc.
64,223,493$2.1b1.9%0.05%
8.92%
PRIMECAP Management Company
52,919,924$1.7b-1.18%1.62%
6.76%
State Street Global Advisors, Inc.
40,111,867$1.3b-1.58%0.07%
5.63%
T. Rowe Price Group, Inc.
33,378,877$1.1b17.59%0.13%
5.55%
BlackRock, Inc.
32,925,113$1.1b1.04%0.03%
2.75%
FMR LLC
16,319,096$523.0m5.5%0.05%
2.67%
Columbia Management Investment Advisers, LLC
15,833,558$507.5m-3.06%0.16%
1.95%
Artisan Partners Limited Partnership
11,572,453$370.9m-2.05%0.39%
1.91%
Geode Capital Management, LLC
11,359,550$364.1m2.31%0.05%
1.6%
J.P. Morgan Asset Management, Inc.
9,523,090$305.2m9.82%0.06%
1.55%
Putnam LLC
9,202,469$294.9m0.73%0.52%
1.42%
American Century Investment Management Inc
8,451,373$270.9m-5.85%0.21%
1.13%
U.S. Global Investors, Inc.
6,688,043$214.4m-6.63%7.96%
0.81%
Northern Trust Global Investments
4,794,639$153.7m-1.24%0.03%
0.74%
Dimensional Fund Advisors LP
4,397,557$140.9m1.86%0.04%
0.73%
Morgan Stanley, Investment Banking and Brokerage Investments
4,345,312$139.3m-12.27%0.03%
0.65%
BNY Mellon Asset Management
3,862,219$123.8m7.5%0.03%
0.59%
Lazard Asset Management LLC
3,526,358$113.0m25.81%0.12%
0.58%
Par Capital Management, Inc.
3,454,404$110.7m0%3.7%
0.49%
Millennium Management LLC
2,903,964$93.1m2.95%0.13%
0.48%
Charles Schwab Investment Management, Inc.
2,877,767$92.2m0.58%0.03%
0.47%
Point72 Asset Management, L.P.
2,778,449$89.0m-12.69%0.26%
0.46%
PGIM, Inc.
2,728,463$87.4m382.94%0.13%
0.44%
Wellington Management Group LLP
2,599,631$83.3m-21.64%0.02%
0.38%
Oldfield Partners LLP
2,227,200$71.4m-2.27%4.35%

Company Information

Southwest Airlines Co.'s employee growth, exchange listings and data sources


Key Information

  • Name: Southwest Airlines Co.
  • Ticker: LUV
  • Exchange: NYSE
  • Founded: 1967
  • Industry: Airlines
  • Sector: Transportation
  • Implied Market Cap: US$19.017b
  • Shares outstanding: 593.35m
  • Website: https://www.southwest.com

Number of Employees


Location

  • Southwest Airlines Co.
  • PO Box 36611
  • Dallas
  • Texas
  • 75235-1611
  • United States


Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
LUVNYSE (New York Stock Exchange)YesCommon StockUSUSDOct 1975
SWNDB (Deutsche Boerse AG)YesCommon StockDEEUROct 1975
SWNXTRA (XETRA Trading Platform)YesCommon StockDEEUROct 1975
LUV *BMV (Bolsa Mexicana de Valores)YesCommon StockMXMXNOct 1975
0L8FLSE (London Stock Exchange)YesCommon StockGBUSDOct 1975
LUVWBAG (Wiener Boerse AG)YesCommon StockATEUROct 1975
S1OU34BOVESPA (Bolsa de Valores de Sao Paulo)BDR EACH 1 REPR 1 SHS UNSPONBRBRLJan 2020

Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2022/09/24 00:00
End of Day Share Price2022/09/23 00:00
Earnings2022/06/30
Annual Earnings2021/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.