Analyst Note
| Burkett Huey, CFA |No-moat-rated Southwest turned a major corner this quarter and became the first U.S.-based airline to post a GAAP profit of $0.19 per share as increasing vaccinations substantially increased travel demand from March onward. While the firm would have posted a loss of $1 billion without the second round of payroll support, we think these operating results are indicative of a substantially better operating environment for leisure travel. We’re raising our fair value to $66 per share from $63 as we now expect Southwest can generate operating profits in 2021. We're also decreasing our uncertainty rating for the firm to high from very high.