Consider the following data for the airline industry for July 2018 (EV=enterprise value, Book=equity bookvalue).

Suppose Alaska Air(ALK) has 124 million shares outstanding.

Estimate AlaskaAir's share value using each of the five valuationmultiples, based on the median valuation multiple of the other seven airlines shown.

Company Name

Market Capitalization

Enterprise Value (EV)

EV/Sales

EV/EBITDA

EV/EBIT

P/E

Forward P/E

Alaska Air (ALK)

7286

8207

1.02

5.1

6.7

7.7

12.5

American Airlines (AAL)

17879

37327

0.87

5.7

8.2

10.5

8.2

Delta Air Lines (DAL)

35580

44164

1.02

5.7

8

10.8

8.8

Hawaiian (HA)

2023

2057

0.73

3.4

4.1

5.8

7.2

JetBlue Airways (JBLU)

5450

5814

0.8

4.1

5.9

4.9

10.8

SkyWest (SKYW)

2909

5040

1.56

7.2

12.6

6.6

11.8

Southwest Airlines (LUV)

30318

30691

1.44

6.9

8.9

8.6

12.3

United Continental (UAL)

21961

31393

0.8

5.7

9.2

11.4

9.3

Source: CapitalIQ

July 2018