Discounted Cash Flow (DCF) Analysis Levered
Southwest Airlines Co. (LUV)
$30.7686
+0.18 (+0.58%)
All numbers are in Millions, Currency in USD
Free Cash Flow
Year A/P | 2018 Actual | 2019 Actual | 2020 Actual | 2021 Actual | 2022 Actual | 2023 Projected | 2024 Projected | 2025 Projected | 2026 Projected | 2027 Projected |
| Revenue | 21,965 | 22,428 | 9,048 | 15,790 | 23,814 | 27,849.34 | 32,568.48 | 38,087.29 | 44,541.28 | 52,088.91 |
|---|---|---|---|---|---|---|---|---|---|---|
| Revenue (%) | ||||||||||
| Operating Cash Flow | 4,893 | 3,987 | -1,127 | 2,322 | 3,790 | 3,242.66 | 3,792.14 | 4,434.73 | 5,186.21 | 6,065.02 |
| Operating Cash Flow (%) | ||||||||||
| Capital Expenditure | -1,976 | -1,027 | -515 | -511 | -3,946 | -2,176.34 | -2,545.12 | -2,976.40 | -3,480.76 | -4,070.58 |
| Capital Expenditure (%) | ||||||||||
| Free Cash Flow | 2,917 | 2,960 | -1,642 | 1,811 | -156 | 1,066.33 | 1,247.02 | 1,458.33 | 1,705.45 | 1,994.44 |
Weighted Average Cost Of Capital
| Share price | $ 30.7,686 |
|---|---|
| Beta | 1.141 |
| Diluted Shares Outstanding | 607 |
| Cost of Debt | |
| Tax Rate | 25.96 |
| After-tax Cost of Debt | 2.36% |
| Risk-Free Rate | |
| Market Risk Premium | |
| Cost of Equity | 9.141 |
| Total Debt | 9,431 |
| Total Equity | 18,676.54 |
| Total Capital | 28,107.54 |
| Debt Weighting | 33.55 |
| Equity Weighting | 66.45 |
| Wacc |
Build Up Free Cash Flow
Year A/P | 2018 Actual | 2019 Actual | 2020 Actual | 2021 Actual | 2022 Actual | 2023 Projected | 2024 Projected | 2025 Projected | 2026 Projected | 2027 Projected |
| Revenue | 21,965 | 22,428 | 9,048 | 15,790 | 23,814 | 27,849.34 | 32,568.48 | 38,087.29 | 44,541.28 | 52,088.91 |
|---|---|---|---|---|---|---|---|---|---|---|
| Operating Cash Flow | 4,893 | 3,987 | -1,127 | 2,322 | 3,790 | 3,242.66 | 3,792.14 | 4,434.73 | 5,186.21 | 6,065.02 |
| Capital Expenditure | -1,976 | -1,027 | -515 | -511 | -3,946 | -2,176.34 | -2,545.12 | -2,976.40 | -3,480.76 | -4,070.58 |
| Free Cash Flow | 2,917 | 2,960 | -1,642 | 1,811 | -156 | 1,066.33 | 1,247.02 | 1,458.33 | 1,705.45 | 1,994.44 |
| WACC | ||||||||||
| PV LFCF | 997.78 | 1,091.85 | 1,194.78 | 1,307.42 | 1,430.68 | |||||
| SUM PV LFCF | 6,022.50 |
Terminal Value
| Growth in perpetuity method: | |
|---|---|
| Long-term growth rate | |
| WACC (%) | 6.87 |
| Free cash flow (t + 1) | 2,034.33 |
| Terminal Value | 41,772.63 |
| Present Value of Terminal Value | 29,964.89 |
Intrinsic Value
| Enterprise Value | 35,987.39 |
|---|---|
| Net Debt | -61 |
| Equity Value | 36,048.39 |
| Shares Outstanding | 607 |
| Equity Value Per Share | 59.39 |