Insights

Own Qantas (ASX:QAN) shares? Morgan Stanley sees ‘significant upside’ to earnings

The broker retains its bullish stance on the Flying Kangaroo despite recent challenges due to Omicron.
The post Own Qantas (ASX:QAN) shares? Morgan Stanley sees ‘significant upside’ to earnings appeared first on The Motley Fool Australia. –

Key Points

Investors overlooking ASX travel shares due to Omicron variant impact
Morgan Stanley bullish on Qantas, saying its robust balance sheet will withstand challenges
The consensus price target on Qantas is $6.02

Shares in airline operator Qantas Airways Limited (ASX: QAN) inched higher to close at $5 today, up 0.2% at the closing bell.

With international travel yet to normalise, investors are overlooking ASX travel shares like Qantas, especially given renewed economic pressure from the Omicron COVID-19 variant.

As such, the Qantas share price has struggled lately and is down considerably over the past 3 months. It has, however, held stable gains over the past year.

What’s the outlook for Qantas shares?

Despite the short-term noise, broker Morgan Stanley is bullish on the travel stock. It reckons Qantas investors could be in for a positive surprise come next earnings season.

Analysts at the firm note that Qantas’ third quarter tightening of capacity illustrates just how difficult it can be to manage an airline during this pandemic.

However, Morgan Stanley reckons investors should overlook the short-term noise. The broker is confident that “the balance sheet will withstand near-term challenges” and consequently sees “significant upside to earnings under ‘normal’ conditions”.

Morgan Stanley rates the airline a buy and values the company at $7 per share as of yesterday.

Meanwhile, the team at JP Morgan also rates Qantas a buy. They’ve assigned Qantas a $6.30 share price target. The firm remains comfortable on the “prognosis for a domestic aviation recovery” and sees capacity guidance of approximately 109% over 2H FY22 as achievable.

UBS also reckons that any potential threats are already priced into the Qantas share price at its current valuation. In an update last month, the Swiss broker valued Qantas at $6.20 per share and recommended that its clients buy in.

Based on a list of analysts covering Qantas provided by Bloomberg Intelligence, 84.6% rate it as a buy, with a consensus price target of $6.02.

Qantas share price snapshot

The Qantas share price is up 2.46% over the past 12 months to $5 today. Prior to the pandemic crash in February 2020, it was trading at $6.50.

The post Own Qantas (ASX:QAN) shares? Morgan Stanley sees ‘significant upside’ to earnings appeared first on The Motley Fool Australia.

These 5 Cheap Shares Could Be Set For Huge Gains (FREE REPORT)

We hear it over and over from investors, “I wish I had bought Altium or Afterpay when they were first recommended by The Motley Fool. I’d be sitting on a gold mine!” And it’s true.

And while Altium and Afterpay have had a good run, we think these 5 other stocks are screaming buys. And you can find out the names of these stocks in the FREE stock report.

*Extreme Opportunities returns as of February 15th 2021

More reading

Brokers name 3 ASX shares to buy today

ASX 200 (ASX:XJO) midday update: Qantas cuts capacity, Afterpay hits 52-week low

5 things to watch on the ASX 200 on Friday

Qantas (ASX:QAN) share price on watch after cutting capacity due to the Omicron outbreak

Is it a buy in 2022? Leading brokers size up the Qantas (ASX:QAN) share price

The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

Trade The World Anywhere & Anytime!

Mobile app platform with over 50,000 global listed securities across 12 markets (over 70% global market capitalisation), right from your Android or iOS device.

Integrated with exclusive trading idea and investment analysis tools to help you find actionable insight on virtually every financial instrument across our 12 global markets, to help you optimise your trading strategies.

Refer Your Friends

Tell your friends about Monex and gift them FREE access to our trading tools.

We respect your privacy and will only send this one email notification to your friends. 

Share With Your Friends

Share on facebook
Share on twitter
Share on linkedin

Monex Trading Tools Access and Usage Terms

The Monex Trading Tools (referred to as ‘tools’ hereafter) are available to you inside your client portal;


To activate access to the tools, you must have a verified and approved trading account and have made a deposit of at least AUD $1000.


An active and funded account with a positive trading balance is required to continue to have access to the tools;


Although the tools are available to you indefinitely, Monex Securities may at it’s discretion disable access to the tools in the future;


Monex securities reserves the right to change these terms and conditions from time to time, as it sees fit, without notice.

Important Notice
iOS & Android App - 12 International Markets & Over 70% Global Market Cap. $0 Brokerage On US Trades. Click Here!