Southwest Airlines Co Dossier
|
SectorIndustrials IndustryAirlines Beta (adjusted)1.09 Intrinsic Value $43.58median of 6 methods · middle span $32-$153based on filings through 30 Jun 2026 Market Price $41.84Price as of 1 Oct 2026 Near fair valueIntrinsic value is 4% above the market price −50% · IV below pricenear fair value ±15%IV above price · +50% Data confidence Sign in to view data confidence Market Cap $20.5B Enterprise Value $21.6B Shares Outstanding 492M diluted Moat Rating Narrow Next Earnings Date22 Oct 2026 Last ex-dividend3 Sep 2026 All prices and values are periodic snapshots, not live quotes. Source dates are shown for reference. ThesisStreet consensus, scenarios, merits, risks, and invalidation triggers Thesis Summary Southwest's commercial transformation is producing substantial revenue and margin improvement: second-quarter adjusted EPS reached $0.94, adjusted operating margin reached 6.7%, and adjusted RASM increased 20.1%. Nevertheless, elevated fuel expense caused management to replace its prior expectation of at least $4.00 in 2026 adjusted EPS with a wider $3.25-$4.25 range. With the shares closing at $39.64 on August 28, 2026, the base case offers limited appreciation relative to execution, fuel, technology, and Boeing-related risks, supporting a Hold recommendation. This section is the 12-month view: analyst targets and the probability-weighted scenarios built from them. The intrinsic value at the top of this page answers a different question: what the business is worth today. Street view · analyst 12-month targets Low · most bearish analyst$35.00 Mean target$51.79 High · most bullish analyst$67.00 Our research · scenarios, merits, risks, and invalidation triggersResearch as of 2 Sep 2026 Scenarios · 12-month scenario targets Bear CaseDownside scenario $35.0023% Fuel cost remains above the company's assumption, commercial gains moderate as Southwest laps the initial implementation of bag fees and other initiatives, or execution costs push CASM-X above guidance. Full-year adjusted EPS falls below $3.25, causing the shares to revisit the lower portion of their recent annual trading range. Base CaseCentral scenario $51.7956% Matches the consensus meanSouthwest delivers results within its Q3 RASM, CASM-X, fuel-cost, and adjusted-EPS guidance ranges and achieves full-year adjusted EPS within the stated $3.25-$4.25 range. Revenue initiatives offset much, but not all, of the fuel and execution pressure. Bull CaseUpside scenario $67.0021% Commercial initiatives continue converting into pricing and mix gains, Q3 RASM reaches or exceeds the 19.5% guidance ceiling, CASM-X remains controlled, and full-year adjusted EPS reaches the upper end of the $3.25-$4.25 range. Sustained managed-business, loyalty, and co-branded-card momentum supports a return toward the upper portion of the recent annual trading range. Scenarios are anchored to street consensus at the research date, with our probabilities and rationale. Key Investment Merits
Key Investment Risks
All scenarios are estimates and subject to change. Past performance is not indicative of future results. Quality Pillars MembersThis section is available to registered members. Create a free account or sign in to unlock the full breakdown. Explore this dossierValuationIntrinsic value, the six-method breakdown, peer medians, and your assumptions sandbox.Financial SnapshotRevenue, profitability, returns, balance sheet, dividends, and the filing-level detail.Qualitative AnalysisBusiness overview, strategic initiatives, and mergers, acquisitions & partnerships.Outlook & Key DatesForward estimates, reporting calendar, and the monitoring framework. |