Discounted Cash Flow (DCF) Analysis Levered
Southwest Airlines Co. (LUV)
$45.9
+0.90 (+2.00%)
All numbers are in Millions, Currency in USD
Free Cash Flow
Year A/P | 2017 Actual | 2018 Actual | 2019 Actual | 2020 Actual | 2021 Actual | 2022 Projected | 2023 Projected | 2024 Projected | 2025 Projected | 2026 Projected |
Revenue | 21,171 | 21,965 | 22,428 | 9,048 | 15,790 | 16,607.70 | 17,467.75 | 18,372.34 | 19,323.77 | 20,324.47 |
---|---|---|---|---|---|---|---|---|---|---|
Revenue (%) | ||||||||||
Operating Cash Flow | 3,929 | 4,893 | 3,987 | -1,127 | 2,322 | 2,021.53 | 2,126.22 | 2,236.33 | 2,352.14 | 2,473.95 |
Operating Cash Flow (%) | ||||||||||
Capital Expenditure | -2,249 | -1,976 | -1,027 | -515 | -511 | -1,100.30 | -1,157.29 | -1,217.22 | -1,280.25 | -1,346.55 |
Capital Expenditure (%) | ||||||||||
Free Cash Flow | 1,680 | 2,917 | 2,960 | -1,642 | 1,811 | 921.23 | 968.94 | 1,019.11 | 1,071.89 | 1,127.40 |
Weighted Average Cost Of Capital
Share price | $ 45.9 |
---|---|
Beta | 0.922 |
Diluted Shares Outstanding | 607 |
Cost of Debt | |
Tax Rate | 26.26 |
After-tax Cost of Debt | 2.59% |
Risk-Free Rate | |
Market Risk Premium | |
Cost of Equity | 7.096 |
Total Debt | 12,281 |
Total Equity | 27,861.30 |
Total Capital | 40,142.30 |
Debt Weighting | 30.59 |
Equity Weighting | 69.41 |
Wacc |
Build Up Free Cash Flow
Year A/P | 2017 Actual | 2018 Actual | 2019 Actual | 2020 Actual | 2021 Actual | 2022 Projected | 2023 Projected | 2024 Projected | 2025 Projected | 2026 Projected |
Revenue | 21,171 | 21,965 | 22,428 | 9,048 | 15,790 | 16,607.70 | 17,467.75 | 18,372.34 | 19,323.77 | 20,324.47 |
---|---|---|---|---|---|---|---|---|---|---|
Operating Cash Flow | 3,929 | 4,893 | 3,987 | -1,127 | 2,322 | 2,021.53 | 2,126.22 | 2,236.33 | 2,352.14 | 2,473.95 |
Capital Expenditure | -2,249 | -1,976 | -1,027 | -515 | -511 | -1,100.30 | -1,157.29 | -1,217.22 | -1,280.25 | -1,346.55 |
Free Cash Flow | 1,680 | 2,917 | 2,960 | -1,642 | 1,811 | 921.23 | 968.94 | 1,019.11 | 1,071.89 | 1,127.40 |
WACC | ||||||||||
PV LFCF | 871.39 | 866.92 | 862.48 | 858.07 | 853.67 | |||||
SUM PV LFCF | 4,312.54 |
Terminal Value
Growth in perpetuity method: | |
---|---|
Long-term growth rate | |
WACC (%) | 5.72 |
Free cash flow (t + 1) | 1,149.95 |
Terminal Value | 30,912.56 |
Present Value of Terminal Value | 23,407.19 |
Intrinsic Value
Enterprise Value | 27,719.73 |
---|---|
Net Debt | -199 |
Equity Value | 27,918.73 |
Shares Outstanding | 607 |
Equity Value Per Share | 45.99 |