Earnings PotentialIf LUV's turnaround plan can indeed bridge to $3-4 normalized EPS over time, assigning a historical LDD multiple drives a low-mid $40s stock price, or nearly 30% upside from current levels.
Industry OutlookThe RASM outlook is 80 bps ahead of the street on less capacity, which is a bullish indicator for industry dynamics.
Operational StrategySouthwest entered into a sale-leaseback with BBAM for 36 aircraft, which will see a benefit of $92mm in other operating expense from the gains on sale.