Switch to:
Southwest Airlines Co (NYSE:LUV)
Shiller P/E Ratio
42.25 (As of Today)

As of today, Southwest Airlines Co's current share price is $49.85. Southwest Airlines Co's E10 for the quarter that ended in Sep. 2016 was $1.18. Southwest Airlines Co's Shiller P/E Ratio for today is 42.25.

LUV' s Shiller P/E Ratio Range Over the Past 10 Years
Min: 8.55   Max: 66.35
Current: 43

8.55
66.35

During the past 13 years, Southwest Airlines Co's highest Shiller P/E Ratio was 66.35. The lowest was 8.55. And the median was 23.08.

LUV's Shiller P/E Ratio is ranked lower than
91% of the 22 Companies
in the Global Airlines industry.

( Industry Median: 24.14 vs. LUV: 43.00 )

E10 is a concept invented by Prof. Robert Shiller, who uses E10 for his Shiller P/E calculation. E10 is the average of the inflation adjusted earnings of a company over the past 10 years.

Southwest Airlines Co's adjusted earnings per share data for the three months ended in Sep. 2016 was $0.620. Add all the adjusted EPS for the past 10 years together and divide 10 will get our E10, which is $1.18 for the trailing ten years ended in Sep. 2016.


Definition

For the Shiller P/E, the earnings of the past 10 years are inflation-adjusted and averaged. The result is used for P/E calculation. Since it looks at the average over the last 10 years, the Shiller P/E is also called PE10.

The Shiller P/E was first used by professor Robert Shiller to measure the valuation of the overall market. The same calculation is applied here to individual companies.

Southwest Airlines Co's Shiller P/E Ratio for today is calculated as

Shiller P/E Ratio=Share Price/E10
=49.85/1.18
=42.25

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

Southwest Airlines Co's E10 for the fiscal year that ended in Dec14 is calculated as:

For example, Southwest Airlines Co's adjusted earnings per share data for the three months ended in Sep. 2016 was:

Adj_EPS=Earnigns per Share/CPI of Sep. 2016 (Change)*Current CPI (Sep. 2016)
=0.62/241.428*241.428
=0.620

Current CPI (Sep. 2016) = 241.428.

Southwest Airlines Co Quarterly Data

201406201409201412201503201506201509201512201603201606201609
per share eps 0.6700.4800.2800.6600.9000.8800.8200.7901.2800.620
CPI 238.343238.031234.812236.119238.638237.945236.525238.132241.018241.428
Adj_EPS 0.6790.4870.2880.6750.9110.8930.8370.8011.2820.620
201112201203201206201209201212201303201306201309201312201403
per share eps 0.2000.1300.3000.0200.1100.0800.3100.3700.3000.220
CPI 225.672229.392229.478231.407229.601232.773233.504234.149233.049236.293
Adj_EPS 0.2140.1370.3160.0210.1160.0830.3210.3820.3110.225
200906200909200912201003201006201009201012201103201106201109
per share eps 0.120-0.0200.1500.0100.1500.2700.1700.0100.210-0.180
CPI 215.693215.969215.949217.631217.965218.439219.179223.467225.722226.889
Adj_EPS 0.134-0.0220.1680.0110.1660.2980.1870.0110.225-0.192
200612200703200706200709200712200803200806200809200812200903
per share eps 0.0700.1200.3600.2200.1500.0500.440-0.160-0.080-0.120
CPI 201.800205.352208.352208.490210.036213.528218.815218.783210.228212.709
Adj_EPS 0.0840.1410.4170.2550.1720.0570.485-0.177-0.092-0.136

Add all the adjusted EPS together and divide 10 will get our E10.


Explanation

Compared with the regular P/E ratio, which works poorly for cyclical businesses, the Shiller P/E smoothed out the fluctuations of profit margins during business cycles. Therefore it is more accurate in reflecting the valuation of the company.

If a company has consistent business performance, the Shiller P/E should give similar results to regular P/E.

Compared with the P/S ratio, the Shiller P/E makes the comparison between different industries more meaningful.


Be Aware

The Shiller P/E assumes that over the long term, businesses and profitability revert to their means. If a company’s business model does not work in the future compared with the past, the Shiller P/E and P/S ratio will give false valuations.


Related Terms

P/E Ratio, P/B Ratio, P/S Ratio, Price-to-Free-Cash-Flow ratio, E10


Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

Southwest Airlines Co Annual Data

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
ShillerPE 25.1718.2813.9420.0724.0817.2919.2532.9961.0945.16

Southwest Airlines Co Quarterly Data

Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16
ShillerPE 40.9649.7661.0958.5339.7643.1845.1643.7534.8532.96
Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)
FEEDBACK