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Category: Southwest Airlines (LUV)
Date: 10 September 2020 Stock price of Southwest Airlines: $39.22 We take a look at the announcement from Southwest Airlines (LUV) in which they announced that they intend on serving Miami and Palm Springs, California, pending regulatory improvements.
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Our service to both of these airports will bring new, relevant options for our core Customers. Gradually, they're rediscovering leisure travel across the country as their own situations allow. "
More About Southwest Airlines (LUV)
In its 49th year of service, Dallas-based Southwest Airlines Co. (NYSE: LUV) continues to differentiate itself from other air carriers with exemplary Customer Service delivered by more than 60,000 Employees to a Customer base topping 130 million passengers annually. Southwest became the nation’s largest domestic air carrier in 2003 and maintains that ranking based on the U.S. Department of Transportation’s most recent reporting of domestic originating passengers boarded. In peak travel seasons, Southwest operates more than 4,000 weekday departures among a network of 101 destinations in the United States and 10 additional countries.
Southwest coined Transfarency® to describe its purposed philosophy of treating Customers honestly and fairly, and low fares actually staying low. Southwest is the only major U.S. airline to offer bags fly free® to everyone (first and second checked pieces of luggage, size and weight limits apply, some carriers offer free checked bags on select routes or in qualified circumstances), and there are no change fees, though fare differences might apply.
Southwest is committed to returning value to its Shareholders. Since 2010, Southwest has returned more than $11.7 billion to Shareholders through share repurchases and dividends, through September 30, 2019. In the first nine months of 2019, Southwest returned $1.8 billion to Shareholders through the repurchase of $1.45 billion in common stock and the payment of $372 million in dividends.
Southwest coined Transfarency® to describe its purposed philosophy of treating Customers honestly and fairly, and low fares actually staying low. Southwest is the only major U.S. airline to offer bags fly free® to everyone (first and second checked pieces of luggage, size and weight limits apply, some carriers offer free checked bags on select routes or in qualified circumstances), and there are no change fees, though fare differences might apply.
Southwest is committed to returning value to its Shareholders. Since 2010, Southwest has returned more than $11.7 billion to Shareholders through share repurchases and dividends, through September 30, 2019. In the first nine months of 2019, Southwest returned $1.8 billion to Shareholders through the repurchase of $1.45 billion in common stock and the payment of $372 million in dividends.
Press release from Southwest announcing new routes
DALLAS, Sept. 3, 2020 /PRNewswire/ -- Southwest Airlines Co. (NYSE: LUV) today announced plans to bring its Customers two new destinations later this year by initiating service year-round to both Miami International Airport (MIA), and Palm Springs International Airport (PSP), subject to requisite government approvals.
Southwest Airlines Chairman & CEO Gary Kelly shared news of the additional service points on the carrier's route map in a weekly video message to the Company's Employees:
"Our service to both of these airports will bring new, relevant options for our core Customers. Gradually, they're rediscovering leisure travel across the country as their own situations allow. Adding these specific airports to our route map will bring us access to additional revenue at a critical time. It matches our available fleet with demand for very popular destinations.
Each airport fits our route system exceptionally well. Palm Springs is a great California destination. Southwest has long carried more Customers to, from, and within the Golden State than any other airline. Just as we serve multiple airports in metro areas across the country, South Florida is ripe for another. Miami will complement, and augment, existing South Florida service we have in Fort Lauderdale and West Palm Beach. Miami already sees some Southwest aircraft on a weekly basis as part of our maintenance program, so adding an ability for our Customers to travel there with us is a win. In both cases, the unmatchable combination of your Hospitality, our low fares, and our Customer friendly policies will make flying to these airports more affordable and attainable. And this is a time when consumers cheer access to the Southwest brand and our great value."
Southwest Airlines Chairman & CEO Gary Kelly shared news of the additional service points on the carrier's route map in a weekly video message to the Company's Employees:
"Our service to both of these airports will bring new, relevant options for our core Customers. Gradually, they're rediscovering leisure travel across the country as their own situations allow. Adding these specific airports to our route map will bring us access to additional revenue at a critical time. It matches our available fleet with demand for very popular destinations.
Each airport fits our route system exceptionally well. Palm Springs is a great California destination. Southwest has long carried more Customers to, from, and within the Golden State than any other airline. Just as we serve multiple airports in metro areas across the country, South Florida is ripe for another. Miami will complement, and augment, existing South Florida service we have in Fort Lauderdale and West Palm Beach. Miami already sees some Southwest aircraft on a weekly basis as part of our maintenance program, so adding an ability for our Customers to travel there with us is a win. In both cases, the unmatchable combination of your Hospitality, our low fares, and our Customer friendly policies will make flying to these airports more affordable and attainable. And this is a time when consumers cheer access to the Southwest brand and our great value."
Southwest Airlines (LUV) stock vs Delta Airlines (DAL) stock over last 3 years
The image below shows the stock price history of Southwest Airlines (LUV) and Delta Airlines (DAL) over the last 3 years. Recent months has not been good for airline stocks as the Covid-19 pandemic significantly impacted international and domestic travel. Below the stock price returns provided by Southwest Airlines (LUV) and Delta Airlines (DAL) over the last 3 years
While the stock price trends and performance is fairly similar between these two airline stocks, Southwest Airlines just outperformed that of Delta.
- LUV: -28.9%
- DAL: -34.3%
While the stock price trends and performance is fairly similar between these two airline stocks, Southwest Airlines just outperformed that of Delta.
So what is Southwest Airlines stock worth based on the release of their latest earnings report? Based on the earnings report and fiscal guidance provided by Southwest Airlines our our valuation models provide a target (full value) price for Southwest Airlines stock at $57.40 a stock (down significantly from our last valuation of Southwest Airlines). We therefore believe that the stock of Southwest Airlines is undervalued
We usually suggest that long term and fundamental investors get in at least 10% below our target (full value) price which in this case is $57.40. Therefore we believe a good entry point into Southwest Airlines stock is at $51.70 or below. We expect the stock price of Southwest Airlines to increase to levels to closer to our target price in coming weeks and months.
We usually suggest that long term and fundamental investors get in at least 10% below our target (full value) price which in this case is $57.40. Therefore we believe a good entry point into Southwest Airlines stock is at $51.70 or below. We expect the stock price of Southwest Airlines to increase to levels to closer to our target price in coming weeks and months.