Qantas Airways Limited (QAN) Todays Update

Qantas Airways (QAN) has a $4.29 share price target and has represented upside of over 20% from Australian stockmarket analysts from Citi.

Qantas Airways (QAN): Fuel Cost Up, Value Remains

With the oil prices once again reaching record highs this week, Macquarie Research Equities (MRE) have reviewed their oil price assumptions and adjusted their costs for Qantas Airways Limited (QAN). Although, increased fuel costs negatively affect the bottom line for QAN, MRE point out that they still see good value in Australia’s National Carrier. Click through to see what affect increased fuel costs will have on QAN and what their recommendation is.

MREs revised fuel assumptions have increased costs by $514 and $264 million respectively for FY09 and FY10. The net results of the increases in cost have seen downgrades to EPS by 0.3%, 35% and 17% for FY08, FY09 and FY10and the estimated div from 36cps to 24cps. MREs numbers do not include any fare increases that QAN may pass onto passengers which could improve the forecasts.

Despite these downgrades, MRE believes that the market is over compensating the impact of the increases in fuel costs and have maintained their outperform recommendation. The target price is $4.29 and represents upside of over 20%