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Southwest Airlines Co

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Southwest Earnings: Costs Growing Faster and Capacity Slower Than We Expected; Fair Value Lowered 9%

Southwest Airlines reported record quarterly revenue and double-digit operating margin in the second quarter of 2023, but updates to management's longer-term growth plans gave us pause. As a result of less-steep capacity growth than we expected, and permanent increases in the company's cost structure, we've lowered no-moat Southwest Airlines' fair value estimate to $39 from $42.90.

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