Southwest Airlines Co
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+ FollowMarket Cap$20.77B
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Earnings Call Q3 2026
October 22, 2026 - AI Summary
Q3 performance strong; margin durability despite fuel headwind (good/surprising)
- Adjusted operating margin: 5.4%, up +4.8 pts YoY.
- Despite $820M YoY headwind from higher fuel prices, they still delivered.
- Operating revenue: $8.4B (record Q3).
- Adjusted EPS: $0.66 (up +5% YoY), above guidance midpoint, despite a less favorable fuel environment than expected on the prior call.
- RASM: +21.6% YoY, an all-time record and above the top end of their 17.5%–19.5% guidance range.
Outlook: Q4 strong; still beating on RASM expectations (good)
- Q4 RASM forecast: +19% to +21% YoY, also reflecting the usual lapping of bag fees/other initiatives.
- Demand described as healthy and broad-based; ~65% of Q4 revenue already booked.
- Q4 profitability/cost expectation:
- CASM-X: +4.0% to +4.5% YoY with capacity +3% to +4%.
- Adjusted EPS (Q4): $0.55 to $0.80 (using avg fuel price ~ $4.55/gal based on forward curve as of Oct 15).
Costs and liquidity/financing: disciplined cost control; strong balance sheet (good/low risk)
- Q3 CASM-X: up +3.8% YoY with capacity down -0.4% within July guidance.
- Liquidity: $5.6B end of quarter; gross leverage 1.9x (within their 1.0–2.5x target band).
- Financing: entered new $2B revolving credit facility (matures 2031) replacing $1.5B.
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$-4.70
110.1% downside
Current Fair Value
110.1% downsideOvervalued by 110.1% based on the discounted cash flow analysis.
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Share Statistics
| Market cap | $20.77 Billion |
|---|---|
| Enterprise Value | $31.09 Billion |
| Annual dividend | $0.72 |
| Dividend yield | 1.70% |
| Earnings per Share | $0.82 |
| Beta | 1.16 |
| Outstanding Shares | 489,000,000 |
Return
| Return on Equity | 14.37% |
|---|---|
| Return on Assets | 3.45% |
| Return on Invested Capital | 8.74% |
Valuation & Multiples
| P/E Ratio | 20.11 |
|---|---|
| PEG | 5.03 |
| Price to Sales | 0.73 |
| Price to Book Ratio | 3.32 |
| Enterprise Value to Revenue | 0.99 |
| Enterprise Value to EBIT | 21.18 |
| Enterprise Value to Net Income | 29 |
| Total Debt to Enterprise | 0.45 |
| Debt to Equity | 1.9 |
Revenue Sources
No data
Last Earnings Call
Report Date
October 28, 2026
EPS Estimate
$0.77
Consensus analyst estimateRevenue Estimate
$8.23 B
Consensus analyst estimateNext Earnings Call
Expected Date
January 27, 2027
EPS Estimate
$0.70
Consensus analyst estimateRevenue Estimate
$9.21 B
Consensus analyst estimateInstitutional Put/Call Ratio
Compares institutional put options with call options. At 0.00, the ratio is below 1, so institutions hold more calls than puts.
| Put/Call Ratio | 0.0000▼ 75.43% |
|---|---|
| Total Calls | -▼ 100.00% |
| Total Puts | -▼ 100.00% |
Institutional Ownership
Holdings and activity of institutional investors.
| Ownership % | 1.96%▼ 90.70% |
|---|---|
| Total Invested | $402.64M▼ 98.29% |
| Investors Holding | 304▼ 686.00% |
About Southwest Airlines Co
72,790 employees
CEO: Gary Kelly
In its 50th year of service, Dallas-based Southwest Airlines Co. continues to differentiate itself from other air carriers with exemplary Customer Service to a Customer base topping 130 million passengers in 2019. Southwest became the na...