Why this top broker is bullish on the Qantas (ASX:QAN) share price

Analysts see a long growth runway for Qantas shares.
The post Why this top broker is bullish on the Qantas (ASX:QAN) share price appeared first on The Motley Fool Australia. –

The Qantas Airways Limited (ASX: QAN) share price is slightly higher this morning, up 0.54% and changing hands at $5.58 in early trade.

Zooming out, Qantas shares have rallied 2.76% in the past month as the broader travel industry gets ready for the impending restart of domestic and international travel penned in for later this year.

What’s been fuelling the Qantas share price lately?

Qantas shares popped back in August after the company revealed it is planning to restart international flights from December.

Around that time, some destinations including Singapore, the US, UK, Japan and Canada will be reachable by air for the first time since COVID-19 forced the closure of the Australian international border.

The airline carrier is wagering that Australia will reach its 80% double-vaccination target set by the National Cabinet earlier this year.

According to the Department of Health, 64.4% of all eligible people have now been immunised against the SARS-CoV-2 virus.

Investors appear bullish on Qantas shares in a “reopening play” that is gaining steam as vaccination numbers creep up.

As this momentum builds, one leading broker has weighed in and presented their outlook for the Qantas share price.

Can Qantas continue its recovery?

Investment banking giant Citibank certainly believes so and likes the timing of the company’s capital expenditure cycle and the restarting of long-haul international flight routes.

The broker reckons that Qantas’ capital expenditure cycle will eventually peak in FY24, judging by the timing of incoming plane deliveries and the airline’s intention to start non-stop flights to the US in 2022.

Curiously, Citi also believes that Qantas may benefit from more favourable pricing from aircraft manufacturers Boeing (NYSE: BE) who are on the quest to regain both market share and credibility after a few horror years.

City says Boeing may tighten its pricing to become more competitive, thereby helping Qantas’ operating profit margins.

Not only that, the bank likes Qantas’ financial health, and reckons it will only need to make periodic payments to service liabilities on its incoming aircraft, hence avoiding the need to raise more capital and dilute investors’ shareholdings.

Given this view, Citi is bullish on Qantas shares and maintains its buy rating and a $5.93 price target. This implies an upside potential of 7.4% on the current share price.

Fellow broker JP Morgan is also bullish on Qantas shares and recently increased its price target by 10 cents to $5.80.

The Qantas share price has managed to claw back some of its 2020 losses and is 13.75% in the green since January 1.

The Qantas share price is up 32.6% over the past 12 months.

The post Why this top broker is bullish on the Qantas (ASX:QAN) share price appeared first on The Motley Fool Australia.

Should you invest $1,000 in Qantas Airways right now?

Before you consider Qantas Airways , you’ll want to hear this.

Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and Qantas Airways wasn’t one of them.

The online investing service he’s run for nearly a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.

*Returns as of August 16th 2021

More reading

NSW cash splash, business confidence up, Qantas (ASX:QAN) down on Bonza news. Scott Phillips on Nine’s Late News
Qantas (ASX:QAN) share price lifts despite Clive Palmer sell-off
Qantas (ASX:QAN) share price falls amid new budget airline competition
Will the Qantas (ASX:QAN) share price follow Ryanair’s surge on reopening?
Top brokers name 3 ASX shares to buy next week

Citigroup is an advertising partner of The Ascent, a Motley Fool company. JPMorgan Chase is an advertising partner of The Ascent, a Motley Fool company. 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!