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Is this Large Market Cap Stock target price reasonable for Southwest Airlines Co. (NYSE:LUV)?

The company in question is, Southwest Airlines Co. (NYSE:LUV) currently with a stock price of 37.6 (-0.66% today). The market cap for Southwest Airlines Co. is 22908.71, and is in the sector Services, and Regional Airlines industry. The target price for Southwest Airlines Co. is 48.55. Currently Southwest Airlines Co. is trading with a P/E of 10.02, and a forward P/E of 9.63. Average volume for Southwest Airlines Co. is 7323.97 and so far today it is 2653202.

Performance in the last year for Southwest Airlines Co. has been 0.87%. For EPS growth, Southwest Airlines Co. has seen a growth of 99.60%, and is looking to grow in the next year to 2.26%. More long term stats show that EPS growth has been 39.70% over the last five years and could be 13.94% for the next five years. Southwest Airlines Co. has seen sales growth quarter over quarter at 5.30%, with EPS growth quarter over quarter at 42.00%. The 20-day simple moving average is -6.25%, with the 200-day simple moving average coming to -11.07%.

Since the IPO date for Southwest Airlines Co. on the 1/2/1980, Southwest Airlines Co. has seen performance year to date to be -11.73%. With Southwest Airlines Co. trading at 37.6, the dividend yield is 1.06%, and the EPS is 3.78.

So could Southwest Airlines Co., be undervalued? Well as said before P/E is 10.02. The PEG is 0.72, P/S is 1.12 and the P/B is at 3.06. The P/cash is 6.71, with P/free cash flow at 13.94.

Southwest Airlines Co. ability to deal with debt shows that the current ratio is 0.6, and the quick ratio is 0.5. This is with long term debt/equity at 0.32, and total debt/equity at 0.45.

In terms of margins, Southwest Airlines Co. has a gross margin of 76.00%, an operating margin of 21.80% and a profit margin of 12.00%.Payout ratio for Southwest Airlines Co. is 8.50%. Return on assets come to 11.30% with return on investment coming to 26.30%.

Insider ownership for Southwest Airlines Co., is at 0.20% and institutional ownership comes to 82.40%. Outstanding shares are at 605.25. While shares float is 600.78. The float short is currently 1.87%, and short ratio is 1.54.

Disclaimer: Remember there is a risk to your investment, this is not a recommendation, nor personal advice, never invest more than you are able too loose.

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Peter Clarke

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