Shares of the ASX-listed Qantas Airways Limited (AU:QAN) surged to an all-time high after Jefferies raised its price target from AU$7.98 to AU$10.53. The new target reflects an upside potential of 34.4%. Jefferies analyst Anthony Moulder also reaffirmed a Buy rating on the stock based on an overall favourable outlook for the airline’s future profitability.
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Following the upgrade, QAN stock gained 3.4% today and reached a record high of AU$7.82.
Qantas Airways is Australia’s national airline and operates the country’s largest aircraft fleet.
Jefferies Predicts Higher Growth for Qantas
Jefferies is bullish on Qantas mainly due to solid travel demand in domestic and international markets. Additionally, the lower oil prices due to rising U.S. crude inventories have boosted expectations for higher earnings.
Consequently, this has increased expectations for a dividend payment with first-half earnings of FY25, scheduled in February. Qantas last paid a dividend in September 2019, after which it faced significant challenges due to COVID-19.
Moving ahead, Moulder expects demand to remain stable. However, he believes that with lower fuel prices, the airline now has more opportunities to offer discounts and investment in customer service.
Last week, the airline announced new aircraft to expand its international network. Additionally, it launched new destinations and schedule changes to optimize its fleet for rising customer demand in key Asia Pacific and U.S. markets.
Is Qantas a Good Stock to Buy?
According to TipRanks, QAN stock has received a Strong Buy rating, backed by nine Buy and two Hold recommendations. The Qantas share price prediction is AU$7.86, which is similar to the current trading level.
Year-to-date, QAN stock has gained 46%.
