Southwest Airlines Co

Southwest Airlines Co

LUV

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Market Cap$23.5B
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Compare to Similar Companies

P/E RatioDividendsReturn on EquityPrice-to-SalesDebt-to-Equity
Southwest Airlines CoSouthwest Airlines Co30.41.5%12%0.81.9

Earnings Call Q2 2026

July 23, 2026 - AI Summary

Strong Q2 performance proving “transformation working” (profitability + cash) - Adjusted unit revenues +20.1% YoY to an all-time quarterly record (above the high end of prior guidance range). - Adjusted operating margin 6.7% (an improvement of ~3.3 points YoY), with adjusted EPS $0.94 (about +120% YoY), and ROIC called out as ~9% after tax. - Despite a nearly $900M YoY increase in fuel expense (record fuel pressure), the company still generated ~$2B operating cash flow in the first half; Q2 operating cash flow ~$500M (+32% YoY). - Record-adjusted operating revenue $8.7B (highest quarterly revenue in Southwest history). - Why it matters: investors are being shown that earnings power is not just fuel recovery—it’s being driven by commercial/operational transformation.
Commercial momentum: product adoption + loyalty flywheel - Rapid Rewards new member enrollments +35% YoY; program size nearly 100M members (record). - Tier qualification activity at a record; Chase co-branded card acquisitions +28% YoY. - Revenue growth is described as broad-based across bag fees, online travel agency revenue, Chase-related revenue, and strength in the base business. - Demand remains robust: Q2 exited strong; Q3 unit revenue outlook includes ~strong exit rate and “healthy demand / pricing sticky.”
Guidance / forecasts: full-year EPS range narrowed/updated; Q3 unit revenue solid but with comps headwinds - Full-year 2026 adjusted EPS forecast: $3.25 to $4.25 (updated; replaces prior “at least $4” framing). Management says this reflects the forward fuel curve as of July 17 and assumes current fare environment/demand trends. - They estimate a ~$1.33 per share fuel headwind year-to-date, yet still expect earnings broadly aligned with earlier expectations and significant growth vs prior year. - Q3 unit revenue growth expected: +17.5% to +19.5% YoY, but includes a stated headwind from lapping the ~2025 implementation of bag fees and initiatives (bag fees alone cited as about ~$1B/year). - Net investor takeaway: even with tougher year-over-year comps, Southwest expects strong revenue progression; the “sequential deceleration” questions were mainly attributed to the initiative lapping, not weaker demand.

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$52.55

Target Price by Analysts

17.5% upsideSouthwest Airlines Target Price DetailsTarget Price
$-4.64

Current Fair Value

110.4% downside

Overvalued by 110.4% based on the discounted cash flow analysis.

Share Statistics

Market cap$23.50 Billion
Enterprise Value$33.32 Billion
Dividend Yield$0.72 (1.50%)
Earnings per Share$0.82
Beta1.12
Outstanding Shares498,000,000

Return

Return on Equity11.88%ROE
Return on Assets2.78%
Return on Invested Capital6.91%

Valuation & Multiples

P/E Ratio30.43P/E Ratio
PEG-12.06PEG
Price to Sales0.77Price to Sales
Price to Book Ratio3.44Price to Book Ratio
Enterprise Value to Revenue1.15
Enterprise Value to EBIT28.6
Enterprise Value to Net Income40
Total Debt to Enterprise0.39
Debt to Equity1.91Debt to Equity

Revenue Sources

No data

Insider Trades

Last Earnings Call

Report Date
July 22, 2026
EPS Estimate
$0.51
Average shareholder expectation
Revenue Estimate
$8.58 B
Average shareholder expectation

Next Earnings Call

Expected Date
October 21, 2026
EPS Estimate
$0.77
Average shareholder expectation
Revenue Estimate
$8.22 B
Average shareholder expectation

Institutional Put/Call Ratio

Market sentiment based on institutional option activity.

Put/Call Ratio0.0000▼ 58.66%
Total Calls1,500▼ 99.99%
Total Puts-▼ 100.00%

Institutional Ownership

Holdings and activity of institutional investors.

Ownership %0.63%▼ 83.72%
Total Invested$159.17M▼ 99.03%
Investors Holding165▼ 756.00%

ESG Score

No data

About Southwest Airlines Co

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...

Relevant Senate Committees

Joint Committee on Taxation

As the body responsible for analyzing and scoring tax legislation, this committee directly influences the corporate tax burden, capital investment incentives, and overall fiscal policy that profoundly impacts Southwest Airlines' financial performance and strategic planning.

Finance

This committee controls taxation, trade, and entitlement spending. Corporate tax policy directly impacts Southwest's profitability, while trade policy can affect international operations, supply chains, or passenger flows.

Appropriations

This committee allocates federal discretionary spending, including funding for the FAA, TSA, and airport infrastructure projects. Its decisions directly impact the operational environment, safety, and capacity of the aviation system Southwest relies upon.

Health, Education, Labor, and Pensions

Airlines are highly labor-intensive and often unionized. This committee's oversight of labor laws, minimum wage regulations, union relations, and pension policies directly impacts a significant portion of Southwest's operating costs and workforce management.

Commerce, Science, and Transportation

This committee has vast jurisdiction over interstate commerce, including the Federal Aviation Administration (FAA) and Department of Transportation (DOT). It directly regulates airline safety, routes, consumer protection, and competition, making it highly relevant.

Energy and Natural Resources

Fuel is one of the largest operating expenses for airlines. This committee's policies on national energy, oil and gas production, and alternative fuels directly impact fuel prices and supply, which are critical to Southwest's profitability.