Intrinsic value of Southwest Airlines - LUV

Previous Close

$59.20

  Intrinsic Value

$61.66

stock screener

  Rating & Target

hold

+4%

Previous close

$59.20

 
Intrinsic value

$61.66

 
Up/down potential

+4%

 
Rating

hold

We calculate the intrinsic value of LUV stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Revenue (in 0001), $M
Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Variable cost ratio, %
Fixed operating expenses, $M
Interest rate on debt, %
Effective corporate tax rate, %
Production assets / Revenue, %
Life of production assets, yrs
Working capital / Revenue, %
Revenue / Adjusted assets
Adjusted equity ratio
Cash flow adjustment, % of Revenue
Book value of equity, $M
Shares outstanding, mln
Market capitalization, $bln 33.9

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
   2
   3
   4
   5
   6
   7
   8
   9
   10
   11
   12
   13
   14
   15
   16
   17
   18
   19
   20
   21
   22
   23
   24
   25
   26
   27
   28
   29
   30
   31

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  2.00
  2.30
  2.57
  2.81
  3.03
  3.23
  3.41
  3.57
  3.71
  3.84
  3.95
  4.06
  4.15
  4.24
  4.31
  4.38
  4.44
  4.50
  4.55
  4.59
  4.64
  4.67
  4.70
  4.73
  4.76
  4.78
  4.81
  4.83
  4.84
  4.86
Revenue, $m
  21,594
  22,091
  22,659
  23,296
  24,002
  24,777
  25,621
  26,535
  27,519
  28,575
  29,705
  30,910
  32,194
  33,558
  35,006
  36,540
  38,164
  39,881
  41,695
  43,611
  45,633
  47,764
  50,012
  52,379
  54,873
  57,498
  60,262
  63,170
  66,229
  69,447
Variable operating expenses, $m
  17,619
  18,022
  18,483
  19,000
  19,573
  20,202
  20,887
  21,628
  22,426
  23,283
  24,103
  25,081
  26,123
  27,230
  28,404
  29,649
  30,967
  32,360
  33,832
  35,387
  37,027
  38,757
  40,580
  42,501
  44,525
  46,655
  48,897
  51,257
  53,739
  56,350
Fixed operating expenses, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total operating expenses, $m
  17,619
  18,022
  18,483
  19,000
  19,573
  20,202
  20,887
  21,628
  22,426
  23,283
  24,103
  25,081
  26,123
  27,230
  28,404
  29,649
  30,967
  32,360
  33,832
  35,387
  37,027
  38,757
  40,580
  42,501
  44,525
  46,655
  48,897
  51,257
  53,739
  56,350
Operating income, $m
  3,975
  4,069
  4,176
  4,296
  4,429
  4,576
  4,735
  4,907
  5,093
  5,292
  5,602
  5,829
  6,071
  6,328
  6,601
  6,891
  7,197
  7,521
  7,863
  8,224
  8,605
  9,008
  9,431
  9,878
  10,348
  10,843
  11,364
  11,913
  12,490
  13,096
EBITDA, $m
  5,282
  5,404
  5,543
  5,699
  5,872
  6,061
  6,267
  6,491
  6,732
  6,990
  7,266
  7,561
  7,875
  8,209
  8,563
  8,938
  9,336
  9,756
  10,200
  10,668
  11,163
  11,684
  12,234
  12,813
  13,423
  14,065
  14,741
  15,453
  16,201
  16,988
Interest expense (income), $m
  100
  198
  215
  234
  257
  282
  310
  340
  374
  410
  449
  490
  535
  582
  633
  687
  744
  805
  869
  936
  1,008
  1,084
  1,163
  1,247
  1,336
  1,430
  1,528
  1,632
  1,741
  1,855
  1,976
Earnings before tax, $m
  3,777
  3,854
  3,942
  4,039
  4,147
  4,266
  4,394
  4,533
  4,683
  4,843
  5,111
  5,294
  5,489
  5,695
  5,915
  6,147
  6,392
  6,652
  6,927
  7,216
  7,522
  7,844
  8,184
  8,542
  8,918
  9,315
  9,733
  10,172
  10,634
  11,120
Tax expense, $m
  1,020
  1,041
  1,064
  1,091
  1,120
  1,152
  1,186
  1,224
  1,264
  1,308
  1,380
  1,429
  1,482
  1,538
  1,597
  1,660
  1,726
  1,796
  1,870
  1,948
  2,031
  2,118
  2,210
  2,306
  2,408
  2,515
  2,628
  2,746
  2,871
  3,002
Net income, $m
  2,757
  2,814
  2,877
  2,949
  3,028
  3,114
  3,208
  3,309
  3,418
  3,535
  3,731
  3,865
  4,007
  4,158
  4,318
  4,487
  4,666
  4,856
  5,056
  5,268
  5,491
  5,726
  5,974
  6,235
  6,510
  6,800
  7,105
  7,426
  7,763
  8,118

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  25,616
  26,205
  26,879
  27,635
  28,473
  29,392
  30,393
  31,477
  32,644
  33,897
  35,237
  36,667
  38,190
  39,808
  41,525
  43,345
  45,271
  47,308
  49,461
  51,733
  54,131
  56,660
  59,326
  62,134
  65,092
  68,207
  71,485
  74,934
  78,563
  82,381
Adjusted assets (=assets-cash), $m
  25,616
  26,205
  26,879
  27,635
  28,473
  29,392
  30,393
  31,477
  32,644
  33,897
  35,237
  36,667
  38,190
  39,808
  41,525
  43,345
  45,271
  47,308
  49,461
  51,733
  54,131
  56,660
  59,326
  62,134
  65,092
  68,207
  71,485
  74,934
  78,563
  82,381
Revenue / Adjusted assets
  0.843
  0.843
  0.843
  0.843
  0.843
  0.843
  0.843
  0.843
  0.843
  0.843
  0.843
  0.843
  0.843
  0.843
  0.843
  0.843
  0.843
  0.843
  0.843
  0.843
  0.843
  0.843
  0.843
  0.843
  0.843
  0.843
  0.843
  0.843
  0.843
  0.843
Average production assets, $m
  18,636
  19,065
  19,555
  20,105
  20,714
  21,383
  22,111
  22,899
  23,749
  24,660
  25,635
  26,676
  27,783
  28,961
  30,210
  31,534
  32,935
  34,417
  35,983
  37,636
  39,381
  41,221
  43,160
  45,203
  47,355
  49,621
  52,006
  54,515
  57,156
  59,933
Working capital, $m
  -5,075
  -5,191
  -5,325
  -5,475
  -5,641
  -5,823
  -6,021
  -6,236
  -6,467
  -6,715
  -6,981
  -7,264
  -7,566
  -7,886
  -8,226
  -8,587
  -8,968
  -9,372
  -9,798
  -10,249
  -10,724
  -11,225
  -11,753
  -12,309
  -12,895
  -13,512
  -14,161
  -14,845
  -15,564
  -16,320
Total debt, $m
  3,979
  4,341
  4,756
  5,222
  5,738
  6,304
  6,921
  7,589
  8,308
  9,079
  9,905
  10,786
  11,724
  12,721
  13,778
  14,899
  16,086
  17,341
  18,667
  20,067
  21,544
  23,102
  24,744
  26,474
  28,296
  30,214
  32,234
  34,359
  36,594
  38,945
Total liabilities, $m
  15,780
  16,142
  16,557
  17,023
  17,539
  18,105
  18,722
  19,390
  20,109
  20,880
  21,706
  22,587
  23,525
  24,522
  25,579
  26,700
  27,887
  29,142
  30,468
  31,868
  33,345
  34,903
  36,545
  38,275
  40,097
  42,015
  44,035
  46,160
  48,395
  50,746
Total equity, $m
  9,837
  10,063
  10,321
  10,612
  10,934
  11,287
  11,671
  12,087
  12,535
  13,016
  13,531
  14,080
  14,665
  15,286
  15,946
  16,644
  17,384
  18,166
  18,993
  19,866
  20,786
  21,757
  22,781
  23,860
  24,995
  26,191
  27,450
  28,775
  30,168
  31,634
Total liabilities and equity, $m
  25,617
  26,205
  26,878
  27,635
  28,473
  29,392
  30,393
  31,477
  32,644
  33,896
  35,237
  36,667
  38,190
  39,808
  41,525
  43,344
  45,271
  47,308
  49,461
  51,734
  54,131
  56,660
  59,326
  62,135
  65,092
  68,206
  71,485
  74,935
  78,563
  82,380
Debt-to-equity ratio
  0.400
  0.430
  0.460
  0.490
  0.520
  0.560
  0.590
  0.630
  0.660
  0.700
  0.730
  0.770
  0.800
  0.830
  0.860
  0.900
  0.930
  0.950
  0.980
  1.010
  1.040
  1.060
  1.090
  1.110
  1.130
  1.150
  1.170
  1.190
  1.210
  1.230
Adjusted equity ratio
  0.384
  0.384
  0.384
  0.384
  0.384
  0.384
  0.384
  0.384
  0.384
  0.384
  0.384
  0.384
  0.384
  0.384
  0.384
  0.384
  0.384
  0.384
  0.384
  0.384
  0.384
  0.384
  0.384
  0.384
  0.384
  0.384
  0.384
  0.384
  0.384
  0.384

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  2,757
  2,814
  2,877
  2,949
  3,028
  3,114
  3,208
  3,309
  3,418
  3,535
  3,731
  3,865
  4,007
  4,158
  4,318
  4,487
  4,666
  4,856
  5,056
  5,268
  5,491
  5,726
  5,974
  6,235
  6,510
  6,800
  7,105
  7,426
  7,763
  8,118
Depreciation, amort., depletion, $m
  1,307
  1,335
  1,367
  1,402
  1,442
  1,486
  1,533
  1,584
  1,639
  1,698
  1,665
  1,732
  1,804
  1,881
  1,962
  2,048
  2,139
  2,235
  2,337
  2,444
  2,557
  2,677
  2,803
  2,935
  3,075
  3,222
  3,377
  3,540
  3,711
  3,892
Funds from operations, $m
  4,065
  4,148
  4,244
  4,351
  4,470
  4,599
  4,741
  4,893
  5,058
  5,234
  5,396
  5,597
  5,811
  6,038
  6,279
  6,535
  6,805
  7,091
  7,393
  7,712
  8,048
  8,403
  8,777
  9,171
  9,585
  10,022
  10,482
  10,966
  11,474
  12,010
Change in working capital, $m
  -100
  -117
  -133
  -150
  -166
  -182
  -198
  -215
  -231
  -248
  -266
  -283
  -302
  -321
  -340
  -361
  -382
  -404
  -426
  -450
  -475
  -501
  -528
  -556
  -586
  -617
  -649
  -683
  -719
  -756
Cash from operations, $m
  4,164
  4,265
  4,378
  4,501
  4,636
  4,782
  4,939
  5,108
  5,289
  5,482
  5,662
  5,880
  6,113
  6,359
  6,619
  6,895
  7,187
  7,495
  7,819
  8,162
  8,523
  8,904
  9,305
  9,727
  10,171
  10,639
  11,131
  11,649
  12,193
  12,766
Maintenance CAPEX, $m
  -1,187
  -1,210
  -1,238
  -1,270
  -1,305
  -1,345
  -1,389
  -1,436
  -1,487
  -1,542
  -1,601
  -1,665
  -1,732
  -1,804
  -1,881
  -1,962
  -2,048
  -2,139
  -2,235
  -2,337
  -2,444
  -2,557
  -2,677
  -2,803
  -2,935
  -3,075
  -3,222
  -3,377
  -3,540
  -3,711
New CAPEX, $m
  -359
  -429
  -490
  -550
  -610
  -669
  -728
  -788
  -849
  -911
  -975
  -1,040
  -1,108
  -1,177
  -1,249
  -1,324
  -1,401
  -1,482
  -1,566
  -1,653
  -1,745
  -1,840
  -1,939
  -2,043
  -2,152
  -2,266
  -2,385
  -2,510
  -2,640
  -2,777
Cash from investing activities, $m
  -1,546
  -1,639
  -1,728
  -1,820
  -1,915
  -2,014
  -2,117
  -2,224
  -2,336
  -2,453
  -2,576
  -2,705
  -2,840
  -2,981
  -3,130
  -3,286
  -3,449
  -3,621
  -3,801
  -3,990
  -4,189
  -4,397
  -4,616
  -4,846
  -5,087
  -5,341
  -5,607
  -5,887
  -6,180
  -6,488
Free cash flow, $m
  2,618
  2,626
  2,650
  2,681
  2,721
  2,768
  2,822
  2,884
  2,953
  3,028
  3,085
  3,175
  3,273
  3,377
  3,490
  3,610
  3,738
  3,874
  4,019
  4,172
  4,335
  4,507
  4,689
  4,881
  5,084
  5,298
  5,524
  5,762
  6,013
  6,277
Issuance/(repayment) of debt, $m
  311
  363
  415
  466
  516
  566
  617
  667
  719
  772
  826
  881
  938
  997
  1,058
  1,121
  1,187
  1,255
  1,326
  1,400
  1,477
  1,558
  1,642
  1,730
  1,822
  1,918
  2,019
  2,125
  2,236
  2,351
Issuance/(repurchase) of shares, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash from financing (excl. dividends), $m  
  311
  363
  415
  466
  516
  566
  617
  667
  719
  772
  826
  881
  938
  997
  1,058
  1,121
  1,187
  1,255
  1,326
  1,400
  1,477
  1,558
  1,642
  1,730
  1,822
  1,918
  2,019
  2,125
  2,236
  2,351
Total cash flow (excl. dividends), $m
  2,928
  2,989
  3,065
  3,147
  3,237
  3,334
  3,439
  3,551
  3,672
  3,800
  3,911
  4,056
  4,211
  4,374
  4,547
  4,731
  4,924
  5,129
  5,344
  5,572
  5,812
  6,065
  6,331
  6,611
  6,906
  7,217
  7,544
  7,887
  8,249
  8,629
Retained Cash Flow (-), $m
  -196
  -226
  -259
  -290
  -322
  -353
  -384
  -416
  -448
  -481
  -515
  -549
  -585
  -621
  -659
  -699
  -740
  -782
  -827
  -873
  -921
  -971
  -1,024
  -1,078
  -1,136
  -1,196
  -1,259
  -1,325
  -1,394
  -1,466
Prev. year cash balance distribution, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash available for distribution, $m
  2,733
  2,763
  2,806
  2,857
  2,915
  2,981
  3,054
  3,135
  3,223
  3,319
  3,396
  3,507
  3,626
  3,753
  3,888
  4,032
  4,185
  4,346
  4,518
  4,699
  4,891
  5,094
  5,307
  5,533
  5,770
  6,021
  6,285
  6,563
  6,855
  7,163
Discount rate, %
  4.30
  4.52
  4.74
  4.98
  5.23
  5.49
  5.76
  6.05
  6.35
  6.67
  7.00
  7.35
  7.72
  8.11
  8.51
  8.94
  9.39
  9.86
  10.35
  10.87
  11.41
  11.98
  12.58
  13.21
  13.87
  14.56
  15.29
  16.05
  16.86
  17.70
PV of cash for distribution, $m
  2,620
  2,530
  2,442
  2,352
  2,260
  2,163
  2,064
  1,960
  1,852
  1,740
  1,613
  1,497
  1,379
  1,260
  1,141
  1,025
  910
  800
  696
  597
  506
  423
  348
  282
  224
  176
  135
  102
  75
  54
Current shareholders' claim on cash, %
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0

Southwest Airlines Co. (Southwest) operates Southwest Airlines, a passenger airline that provides scheduled air transportation in the United States and near-international markets. The Company provides point-to-point service. The Company offers ancillary service offerings, such as Southwest's EarlyBird Check-In and transportation of pets and unaccompanied minors, in accordance with Southwest's respective policies. Southwest's Rapid Rewards frequent flyer program enables program members (Members) to earn points for every dollar spent on Southwest fares. Its Internet Website, Southwest.com, is an avenue for Southwest customers to purchase and manage travel online. As of December 31, 2016, Southwest operated a total of 723 Boeing 737 aircraft and served 101 destinations in 40 states, the District of Columbia, the Commonwealth of Puerto Rico, and eight near-international countries: Mexico, Jamaica, The Bahamas, Aruba, Dominican Republic, Costa Rica, Belize, and Cuba.

FINANCIAL RATIOS  of  Southwest Airlines (LUV)

Valuation Ratios
P/E Ratio 17.1
Price to Sales 1.9
Price to Book 4.5
Price to Tangible Book
Price to Cash Flow 8.9
Price to Free Cash Flow 17.9
Growth Rates
Sales Growth Rate 3.1%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 0.2%
Cap. Spend. - 3 Yr. Gr. Rate 8.2%
Financial Strength
Quick Ratio 6
Current Ratio 0
LT Debt to Equity 34.9%
Total Debt to Equity 41.6%
Interest Coverage 36
Management Effectiveness
Return On Assets 10.3%
Ret/ On Assets - 3 Yr. Avg. 9.2%
Return On Total Capital 19.8%
Ret/ On T. Cap. - 3 Yr. Avg. 17.5%
Return On Equity 28.4%
Return On Equity - 3 Yr. Avg. 25.1%
Asset Turnover 0.9
Profitability Ratios
Gross Margin 69.1%
Gross Margin - 3 Yr. Avg. 65.9%
EBITDA Margin 23.8%
EBITDA Margin - 3 Yr. Avg. 20.8%
Operating Margin 18.4%
Oper. Margin - 3 Yr. Avg. 17%
Pre-Tax Margin 17.4%
Pre-Tax Margin - 3 Yr. Avg. 14.9%
Net Profit Margin 11%
Net Profit Margin - 3 Yr. Avg. 9.4%
Effective Tax Rate 36.7%
Eff/ Tax Rate - 3 Yr. Avg. 37.2%
Payout Ratio 9.9%

LUV stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the LUV stock intrinsic value calculation we used $21171 million for the last fiscal year's total revenue generated by Southwest Airlines. The default revenue input number comes from 0001 income statement of Southwest Airlines. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our LUV stock valuation model: a) initial revenue growth rate of 2% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 4.3%, whose default value for LUV is calculated based on our internal credit rating of Southwest Airlines, is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of Southwest Airlines.
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of LUV stock the variable cost ratio is equal to 81.6%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $0 million in the base year in the intrinsic value calculation for LUV stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 5.4% for Southwest Airlines.

Corporate tax rate of 27% is the nominal tax rate for Southwest Airlines. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the LUV stock is equal to 0%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for LUV are equal to 86.3%.

Life of production assets of 15.4 years is the average useful life of capital assets used in Southwest Airlines operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for LUV is equal to -23.5%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $9641 million for Southwest Airlines - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 573.019 million for Southwest Airlines is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of Southwest Airlines at the current share price and the inputted number of shares is $33.9 billion.

RELATED COMPANIES Price Int.Val. Rating
JBLU JetBlue Airway 16.87 35.65  str.buy
SAVE Spirit Airline 50.97 148.11  str.buy
ALGT Allegiant Trav 123.47 302.83  str.buy
AAL American Airli 33.57 32.67  hold
DAL Delta Air Line 54.30 199.91  str.buy
UAL United Contine 88.49 196.53  str.buy
ALK Alaska Air Gro 64.49 166.43  str.buy
SKYW Skywest 52.58 8.42  str.sell
HA Hawaiian Holdi 35.06 144.84  str.buy

COMPANY NEWS

▶ 3 Stocks for Warren Buffett Fans   [Oct-16-18 05:00PM  Motley Fool]
▶ OIA's top air carrier ranks high on U.S. airlines list   [10:26AM  American City Business Journals]
▶ Alaska Air Group warns of management layoffs amid cost cutting   [Oct-15-18 02:38PM  American City Business Journals]
▶ Airports in Texas, Houston lead nation in growth over past 10 years   [08:20AM  American City Business Journals]
▶ Southwest balks at American's new idea for Cuba routes   [07:25AM  American City Business Journals]
▶ American, Southwest lead way to big traffic increase at BHM   [Oct-12-18 03:44PM  American City Business Journals]
▶ Dallas Love Field leads nation in airport growth over past 10 years   [Oct-10-18 03:08PM  American City Business Journals]
▶ How to get the best winter travel deals   [12:53PM  Yahoo Finance Video]
▶ Yahoo Finance Live: Midday Movers - Oct 10th, 2018   [09:25AM  Yahoo Finance Video]
▶ Lambert airport's wish list: The nonstops needed most   [08:35AM  American City Business Journals]
▶ 7 things to know today and Orlando named a top foodie-friendly city   [07:00AM  American City Business Journals]
▶ Where Southwest Airlines is growing the most (slideshow)   [04:23PM  American City Business Journals]
▶ Southwest Airlines challenges Delta Air Lines in on-time derby   [03:09PM  American City Business Journals]
▶ Why viewers found these women's ads inspiring   [08:03AM  American City Business Journals]
▶ Southwest Airlines enters a new 737 era with major assist from Spirit AeroSystems   [Oct-05-18 01:55PM  American City Business Journals]
▶ Alaska Air Group affiliate wins deal for Paine Field's commercial ground operations   [Oct-03-18 05:06PM  American City Business Journals]
▶ 7 Airline Stocks Losing Altitude   [11:44AM  InvestorPlace]
▶ 3 Airline Stocks to Buy Following Recent Turbulence   [Oct-02-18 03:18PM  InvestorPlace]
▶ Passenger jets at Paine Field won't cause 'significant' extra noise, FAA concludes   [Oct-01-18 03:41PM  American City Business Journals]
▶ Southwest, United carry Sky Harbor to positive passenger numbers in August   [Sep-28-18 04:00PM  American City Business Journals]
▶ Taking a Fresh Look at the Airlines   [07:00AM  Morningstar]
▶ Imperial Capital Turns Bullish On Alaska Air   [Sep-27-18 02:18PM  Benzinga]
▶ Stock Market Rises On Strength In Internet-Related Stocks   [11:55AM  Investor's Business Daily]
▶ Southwest Airlines is growing the fastest at these airports   [07:39AM  American City Business Journals]
▶ British Airways to introduce new uniforms   [Sep-26-18 02:13PM  American City Business Journals]
▶ Congress fighting for legroom on planes   [Sep-24-18 01:27PM  Yahoo Finance Video]
▶ [$$] Companies Buy Earnings Gains by Buying Back Stock   [Sep-23-18 10:00AM  The Wall Street Journal]
▶ Southwest Airlines to build $130M regional maintenance facility at BWI   [04:07PM  American City Business Journals]
▶ Why Southwest Airlines mechanics said 'no' to tentative agreement   [03:11PM  American City Business Journals]
▶ Delta Air Lines bumps its baggage fees   [Sep-19-18 05:33PM  American City Business Journals]
▶ Southwest Airlines mechanics' battle for contract is far from over   [01:35PM  American City Business Journals]
▶ Why Customer Loyalty Is So Important to Investors   [Sep-18-18 06:10PM  Motley Fool]
▶ Southwest Airlines mechanics reject tentative contract   [03:37PM  American City Business Journals]
▶ Southwest Airlines settles lawsuit with pilots for $19M   [11:00AM  American City Business Journals]
▶ 8 Stocks To Lead The Market: Morgan Stanley   [Sep-14-18 01:32PM  Investopedia]

CONTACT US       ASSET ALLOCATION

About X-FIN       Site news       Privacy policy       Terms of use       FAQ

Copyright © X-FIN.com 2005-2018. All rigths reserved.