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Morningstar Rating
Stock XNYS Rating as of
$28.32 +0.27(0.96%)
View Full ChartAs of Cboe BZX Real-Time Price Open
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Company Report
Company Report
Southwest Airlines: Activist Calling for Turnaround Announces 11% Stake; Holding Fair Value for Now
Nicolas Owens
On June 10, Elliott Investment Management published a letter to Southwest Airlines' board of directors calling for a new board, new management, and an operational turnaround for the beleaguered carrier while disclosing it had accumulated a $1.9 billion or approximately 11% ownership stake in the no-moat company. Pending further action by the board or other stakeholders, we have not altered our fair value estimate.
Price vs Fair Value
Price vs Fair Value
LUV is trading at a 771% premium.
Price
$28.05
Fair Value
$84.00
Uncertainty
High
- 1-Star Price
- $98.27
- 5-Star Price
- $81.30
- Economic Moat
- Mhbr
- Capital Allocation
- Chffbxtm
Bulls Say, Bears Say
Bulls Say, Bears Say
Bulls
Southwest operates a leisure-focused low-cost carrier, which is well-positioned for a leisure-led post-pandemic recovery in aviation.
Bears
Major 2022 holiday travel disruptions put a spotlight on Southwest's antiquated operating systems. A necessary system overhaul could reduce the firm's near- to midterm profit margin and free cash flow.
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News
News
- SOUTHWEST AIRLINES COMMENTS ON LETTER AND PRESENTATION FROM ELLIOTT INVESTMENT MANAGEMENT
- SOUTHWEST AIRLINES CELEBRATES WANNA GET AWAY WEEK WITH EXCLUSIVE OFFERS AND WEEK-LONG SWEEPSTAKES
- Southwest Airlines' stock surges after activist Elliott says it can soar 77%
- Elliott Sends Letter and Presentation to the Board of Southwest Airlines
- Elliott reportedly builds big stake in Southwest Airlines, will seek changes
- SOUTHWEST AIRLINES RANKED TOP AIRLINE ON FORBES AMERICA'S BEST EMPLOYERS FOR VETERANS LIST
- SOUTHWEST AIRLINES RANKS FIRST IN CUSTOMER SATISFACTION AMONG ECONOMY CLASS PASSENGERS BY J.D. POWER
- Spirit and Frontier just scrapped some fees, but brace for extra charges on these 10 U.S. airlines
Trading Information
Trading Information
- Previous Close Price
- $28.05
- Day Range
$28.13–28.76
- 52-Week Range
$21.92–39.52
- Bid/Ask
- $28.30/$28.31
- Market Cap
- $16.95 Bil
- Volume/Avg
- 3.1 Mil/10.3 Mil
Key Statistics
Key Statistics
- Price/Earnings (Normalized)
- 18.75
- Price/Sales
- 0.67
- Dividend Yield (Trailing)
- 2.57%
- Dividend Yield (Forward)
- 2.57%
- Total Yield
- 2.57%
Company Profile
Company Profile
Southwest Airlines is the largest domestic air carrier in the United States by passengers boarded. Southwest operates over 800 aircraft in an all-Boeing 737 fleet. Despite offering some longer routes and a few perks for business travelers, the airline predominantly specializes in short-haul, leisure flights operated in a single, open-seating cabin configuration in a point-to-point network.
- Sector
- Industrials
- Industry
- Airlines
- Stock Style Box
- Mid Core
- Total Number of Employees
- 74,695
- Website
- https://www.southwest.com
Competitors
Competitors
- American Airlines Group Inc AAL
- Delta Air Lines Inc DAL
Valuation
Valuation
| Metric | LUV | AAL | DAL |
|---|---|---|---|
Price/Earnings (Normalized) | 18.75 | 5.01 | 7.65 |
Price/Book Value | 1.63 | — | 2.85 |
Price/Sales | 0.67 | 0.15 | 0.54 |
Price/Cash Flow | 9.24 | 3.06 | 4.79 |
Price/Earnings
LUV
AAL
DAL
Financial Strength
Financial Strength
| Metric | LUV | AAL | DAL |
|---|---|---|---|
Quick Ratio | 0.97 | 0.44 | 0.29 |
Current Ratio | 1.09 | 0.62 | 0.41 |
Interest Coverage | 0.74 | 1.25 | 8.69 |
Quick Ratio
LUV
AAL
DAL
Profitability
Profitability
| Metric | LUV | AAL | DAL |
|---|---|---|---|
Return on Assets (Normalized) | 2.62% | 1.90% | 5.85% |
Return on Equity (Normalized) | 9.01% | — | 47.04% |
Return on Invested Capital (Normalized) | 3.46% | 6.45% | 13.54% |
Return on Assets
LUV
AAL
DAL
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Airlines Industry Comparables
Airlines Industry Comparables
| 1-Day Chart | Name | Price | Morningstar Rating for Stocks | Capital Allocation | Economic Moat | Market Cap |
|---|---|---|---|---|---|---|
| Delta Air Lines Inc DAL | Ywmmdbyc | Ghrms | $31.8 Bil | |||
| Ryanair Holdings PLC ADR RYAAY | — | Pbbdbm | $21.1 Bil | |||
| United Airlines Holdings Inc UAL | Kczlkyxp | Ffkb | $17.1 Bil | |||
| Singapore Airlines Ltd SINGF | — | Rfj | $14.9 Bil | |||
| Singapore Airlines Ltd ADR SINGY | — | Chxg | $14.9 Bil | |||
| Air China Ltd ADR AIRYY | — | Smm | $14.8 Bil | |||
| Air China Ltd Class H AICAF | — | Kglwp | $14.7 Bil | |||
| China Southern Airlines Co Ltd Class H CHKIF | — | Djpj | $13.0 Bil | |||
| American Airlines Group Inc AAL | Dpnfbtmnp | Lpyzt | $7.4 Bil |
