Qantas Airways (ASX:QAN) shares rose as much as 13% in the morning, hitting a multiple-month high of AU$5.84. The stock took off after the Australian airline issued a better than expected half-year profit outlook.
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Inside Qantas’ half-year profit guidance
The airline anticipates profit before tax of between AU$1.2 billion and AU$1.3 billion for the six months through to December. The half-year profit Qantas anticipates almost exceeds what some analysts were expecting from the airline for the entire year.
The airline is benefiting from strong travel demand and high ticket prices, helping it offset high fuel costs and other inflationary pressures. A half-year profit would mark a significant improvement in Qantas’ financial performance, as it has been reporting heavy losses for five successive half-year periods.
Qantas also sees its balance sheet strengthening. The airline expects its net debt to decline to between AU$3.2 billion and $3.4 billion, below the target range of AU$3.9 billion.
Qantas Airways share price forecast
According to TipRanks’ analyst rating consensus, Qantas Airways stock is a Moderate Buy based on seven Buys, one Hold, and one Sell. The average Qantas share price forecast of AU$6.29 suggests about 9% upside potential.
Closing remarks
If global central banks’ efforts to combat inflation succeed without sparking a recession, then airlines like Qantas could see operating costs reduce. That may lead to enhanced profits.