Qantas Airways (QAN) Update

Submitted by Craig Strzelecki on 13 April, 2007 - 18:53

Qantas Airways (QAN) has a restricted price target and broker call from stockmarket analyst UBS. The analysts are raising our Qantas EPS forecasts by 6% in FY07 and 9% in FY08 to take account of stronger than expected traffic numbers, changes to their fleet plan, and a review of their yield assumptions. Their new forecasts sit around 5% ahead of management guidance but not far off consensus. The key issue impacting our FY08 forecasts is whether Qantas can sustain its current 15% growth in international unit revenue. They are forecasting a drop off to 4% growth in FY08, but given the dearth of international capacity for Qantas and the whole industry, their assumption could be too low. Each 1% additional unit revenue growth growth equates to 5% extra EPS. Qantas is trading on 12.2x the analyst's new FY08 EPS forecast, which is at the upper end of its most comparable peers (Singapore, Cathay, Air France, Lufthansa). This is also at a 65% relativity to the Australian All Industrials average, which is at the upper end of its historical trading range. Qantas Airways is currently the subject of a A$5.60 all cash bid by Airline Partners Australia, which closes on May 4.

Qantas Airways Limited is listed on the Australian Stock Exchange (ASX) under stock code QAN. You can view their investor website here. QAN was listed on the ASX on 31 July, 1995. Margaret Jackson is the chairperson for Qantas and Geoff Dixon is the CEO. The company is involved in the operation of international and domestic air transportation services, the sale of worldwide and domestic holiday tours and associated support activities including catering, information technology, ground handling and engineering and maintenance. They also also operate subsidiary businesses including other airlines, and businesses in specialist markets such as Qantas Holidays and Qantas Flight Catering. Find out the meaning of the recommendations in this primer. Browse for other stockbroker recommendations. You can use Instalment Warrants to trade QAN. Check your charts and good luck with your share trading!