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Southwest Airlines Co. — Intrinsic Value & Fair Price

LUV
NYSEIndustrialsAirlines, Airports & Air ServicesCIK 0000092380southwest.comAbout LUV
Valuation grade ?B
Quant grade ?B
Last close · Oct 30, 202642.43−1.25 (−2.86%)
Model value · P/E · peers
49.98
Southwest Airlines closed at $42.43 — undervalued by 15% vs model.
43.86the model's range67.01

P/E · peers leads because DCF · Perpetuity growth · 5y could not lead: the cash-flow gate is shut (an operating loss, or three years of free cash flow summing below zero). From its peers' median P/E.

Other models
4.16 – 69.47
Wall St. target
52.00 18% below
Below model, 1y
27 of 30 days

How it is valued

Valued asCyclical
Low/slowing growth (~4% recent)Decelerated from ~25% 5y CAGRThin margins (1.6% net margin)Pays dividendsHighly cyclical earningsNegative free cash flow
What growth the price implies: the reverse DCF

Model estimates for research reference only, not investment advice. Every model rests on assumptions that may not match what happens; how each model works is in the manual.