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Qantas Airways Limited (AU:QAN)
:QAN
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Qantas Airways Limited
(OTC:QAN)
Rating:74Outperform
Price Target:
AU$12.00
▲(8.70%Upside)
Positive Factors
Business Strategy
Exiting the Jetstar Asia business is seen as a positive move, demonstrating management discipline and reducing renewal capital expenses over time.
Loyalty Program
Qantas's loyalty program, one of the world's most diverse airline loyalty programmes, is expected to further boost earnings growth with underlying EBIT expected to reach AUD500-550m in FY24F.
Market Position
Qantas has increased its market share in both the domestic and international markets over the pandemic due to consolidation in the sector and its stronger financial position.
Negative Factors
Cost Pressures
Higher than expected fuel costs will have a negative impact on profitability, though Qantas is better hedged than most competitors.
Financial Outlook
Jetstar Asia losses are likely worse than market expectations, impacting Qantas’ financial outlook.
Operational Challenges
A capacity reduction to Group International is expected due to industrial action on the Finnair wet lease.
Qantas Airways Limited (QAN) vs. iShares MSCI Australia ETF (EWA)
Market Cap
AU$16.51B
Dividend Yield2.31%
Average Volume (3M)4.56M
Price to Earnings (P/E)13.1
Beta (1Y)1.09
Revenue Growth9.24%
EPS Growth-7.82%
CountryAU
Employees20,000
SectorIndustrials
Sector Strength90
IndustryAirlines, Airports & Air Services
Share Statistics
EPS (TTM)0.63
Shares Outstanding1,513,199,200
10 Day Avg. Volume2,831,471
30 Day Avg. Volume4,560,694
Financial Highlights & Ratios
PEG Ratio1.43
Price to Book (P/B)23.03
Price to Sales (P/S)0.00
P/FCF Ratio11.49
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
AU$11.19Price Target Upside1.39% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering12
Qantas Airways Limited Business Overview & Revenue Model
Company DescriptionQantas Airways Limited provides air transportation services in Australia and internationally. The company operates through Qantas Domestic, Qantas International, Jetstar Group, and Qantas Loyalty segments. It offers passenger flying, and air cargo and express freight services; and customer loyalty recognition programs. As of June 30, 2022, the company operated a fleet of 322 aircraft under the Qantas and Jetstar brands. Qantas Airways Limited was founded in 1920 and is based in Mascot, Australia.
How the Company Makes MoneyQantas Airways Limited generates revenue primarily through the sale of passenger tickets for domestic and international flights. This is the largest component of its income, driven by its extensive network and service offerings. The company also earns significant revenue from its freight division, Qantas Freight, which handles cargo transportation. Another key revenue stream comes from its loyalty program, Qantas Frequent Flyer, which offers points redemption options and partnerships with various businesses. Ancillary services, such as on-board sales and baggage fees, also contribute to its earnings. Moreover, Qantas benefits from its Jetstar subsidiary, which taps into the budget travel market. Strategic partnerships and alliances with other airlines further enhance its revenue potential by expanding its market reach.
Qantas Airways Limited Earnings Call Summary
Earnings Call Date:Feb 26, 2025
(Q4-2024)
| % Change Since: 27.64%|
Next Earnings Date:Aug 28, 2025
Earnings Call Sentiment Positive
The earnings call highlighted strong financial performance, particularly in the Jetstar and Loyalty segments, along with significant investment in fleet renewal. However, challenges remain in Qantas International earnings and cost management. Overall, the positive aspects of growth and operational improvements outweigh the negatives.Q4-2024 Updates
Positive Updates
Strong Financial Performance
Qantas announced an underlying profit of $2.08 billion for FY 2024, with an underlying EPS of $0.88 per share. Statutory profit after tax was $1.25 billion.
Jetstar Record Results
Jetstar reported an underlying EBIT of $497 million, up 23% from the prior year, driven by strong demand for low-fare travel and the introduction of new A321LRs.
Qantas Loyalty Growth
Qantas Loyalty delivered an underlying EBIT of $511 million, with total points earned and redeemed growing at double-digit rates. Active membership increased by 19%.
Fleet Renewal and Investment
Qantas is on track to receive over 40 new aircraft in the next two years. The group invested $3.1 billion in CapEx in FY 2024.
Operational Improvements
The group saw an increase in on-time performance and NPS, with Qantas Domestic reporting a 24-point jump in NPS.
Negative Updates
Decline in Qantas International Earnings
Qantas International, including freight, recorded an underlying EBIT of $556 million, with declines driven by reduced freight yields and increased market capacity.
Challenges in Cost Management
The group faced increased costs due to customer investments, inefficiencies from delayed fleet exits, and legal provisions.
Impact of ACCC Settlement and Legal Provisions
Statutory profit was impacted by one-off costs from the ACCC settlement and legal provisions related to ground handling.
Company Guidance
In the Qantas Airways Q4 2024 earnings call, the company reported a strong financial performance, highlighted by an underlying profit of $2.08 billion and an underlying EPS of $0.88 per share. The statutory profit after tax was $1.25 billion, illustrating a decline due to factors such as the ACCC settlement and legal provisions. The group's operating margin stood at 10.4%, maintaining its position as one of the strongest globally in the airline industry. Net debt was reported at $4.1 billion, at the lower end of the group's target range, and operating cash flow was robust at $3.4 billion. The company outlined a $3.1 billion investment in CapEx across fleet and projects, with 16 new aircraft joining the fleet. Jetstar achieved a record underlying EBIT of $497 million, up 23% year-on-year, driven by strong demand for low-fare travel and the introduction of new A321LR aircraft. Qantas Domestic recorded an underlying EBIT of $1.06 billion, while Qantas International, including freight, reported an underlying EBIT of $556 million. The group also announced a new $400 million share buyback and plans to reinstate a fully franked base dividend in the second half, pending board approval.Qantas Airways Limited Financial Statement Overview
Summary
Qantas demonstrates strong revenue growth and operational efficiency. However, profitability is challenged with declining net profit and free cash flow margins. The balance sheet is highly leveraged, posing financial risk.Income Statement
Qantas has shown significant improvement in revenue growth, with a 10.7% increase in 2024 compared to 2023. The gross profit margin increased to 53.0% in 2024, indicating improved operational efficiency. However, the net profit margin declined to 5.8% from 8.9% in 2023, suggesting challenges in converting revenue into profit. EBIT and EBITDA margins also showed a decline from the previous year, highlighting some pressure on core earnings.72
Positive
Balance Sheet
The debt-to-equity ratio improved but remains high at 22.80, which indicates significant leverage and potential financial risk. Return on equity (ROE) is robust at 434.6%, driven by high net income relative to equity, but this is partly due to the low equity base. The equity ratio remains very low at 1.4%, showing limited equity cushion against liabilities.65
Positive
Cash Flow
Free cash flow decreased significantly, with a 72.7% decline from 2023 to 2024. Operating cash flow remains strong relative to net income, indicating solid cash generation capabilities, despite challenges in maintaining free cash flow levels. The free cash flow to net income ratio is below 1, suggesting that not all earnings are translating into free cash flow.68
Positive
| Breakdown | Jun 2024 | Jun 2023 | Jun 2022 | Jun 2021 | Jun 2020 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 21.62B | 19.52B | 8.70B | 5.38B | 14.05B |
| Gross Profit | 11.46B | 10.97B | 4.52B | -991.00M | 4.12B |
| EBITDA | 3.90B | 4.52B | 928.00M | -176.00M | -334.00M |
| Net Income | 1.25B | 1.75B | -860.00M | -1.69B | -1.96B |
Balance Sheet | |||||
| Total Assets | 20.56B | 20.35B | 19.65B | 17.81B | 20.03B |
| Cash, Cash Equivalents and Short-Term Investments | 1.98B | 3.17B | 3.34B | 2.22B | 3.52B |
| Total Debt | 6.59B | 6.73B | 7.23B | 8.23B | 8.54B |
| Total Liabilities | 20.27B | 20.34B | 19.84B | 17.36B | 18.50B |
| Stockholders Equity | 289.00M | 5.00M | -197.00M | 440.00M | 1.52B |
Cash Flow | |||||
| Free Cash Flow | 680.00M | 2.49B | 1.75B | -1.15B | -514.00M |
| Operating Cash Flow | 3.35B | 5.05B | 2.65B | -407.00M | 1.03B |
| Investing Cash Flow | -2.89B | -2.59B | -225.00M | -701.00M | -1.52B |
| Financing Cash Flow | -2.01B | -2.63B | -1.31B | -181.00M | 1.85B |
Qantas Airways Limited Technical Analysis
Positive
11.04
Price Trends
10.45
Positive
9.70
Positive
9.07
Positive
Market Momentum
0.17
Negative
65.53
Neutral
78.32
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AU:QAN, the sentiment is Positive. The current price of 11.04 is above the 20-day moving average (MA) of 10.64, above the 50-day MA of 10.45, and above the 200-day MA of 9.07, indicating a bullish trend. The MACD of 0.17 indicates Negative momentum. The RSI at 65.53 is Neutral, neither overbought nor oversold. The STOCH value of 78.32 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for AU:QAN.
Qantas Airways Limited Peers Comparison
Overall Rating
UnderperformOutperform
Sector (65)
Financial Indicators
Performance Comparison
AU:QAN
Qantas Airways Limited
11.04
5.21
89.46%
DE:R4L
Regional Express Holdings Limited
0.31
-0.03
-8.82%
AU:AQZ
Alliance Aviation Services Limited
2.64
-0.40
-13.16%
Qantas Airways Limited Corporate Events
Qantas Airways Cyber Incident: Customer Data Breach Contained
Jul 1, 2025
Qantas Airways has experienced a cyber incident affecting customer data at one of its contact centers. While the breach involved unauthorized access to a third-party customer servicing platform, Qantas’ operations and airline safety remain unaffected. The company is actively reaching out to affected customers to provide support and has implemented additional security measures. The breach did not compromise credit card details or personal financial information, and Qantas is working with Australian authorities to investigate the incident.
The most recent analyst rating on (AU:QAN) stock is a Hold with a A$9.65 price target. To see the full list of analyst forecasts on Qantas Airways Limited stock, see the AU:QAN Stock Forecast page.
Qantas Airways Announces Change in Voting Share Control
Jun 17, 2025
Qantas Airways Limited has announced a change in the control of voting shares, with its controlled entities no longer holding any interest in such shares. This change follows the transfer of shares from Qantas Superannuation Limited to Australian Retirement Trust as part of a successor fund transfer, indicating a shift in the company’s shareholding structure.
The most recent analyst rating on (AU:QAN) stock is a Buy with a A$8.50 price target. To see the full list of analyst forecasts on Qantas Airways Limited stock, see the AU:QAN Stock Forecast page.
Qantas Group to Close Jetstar Asia Amid Strategic Restructure
Jun 11, 2025
Qantas Group has announced the closure of its Singapore-based low-cost subsidiary, Jetstar Asia, as part of a strategic restructure to support its fleet renewal program. This move will recycle up to $500 million in capital, allowing the redeployment of 13 Airbus A320 aircraft to Australia and New Zealand, creating local jobs and offering more low fares. The decision comes amid rising costs and competition in the region, with Jetstar Asia expected to post a $35 million EBIT loss this financial year. The closure will impact 16 intra-Asia routes but not Jetstar Airways’ or Jetstar Japan’s operations. Qantas will provide support to affected employees and customers, and the closure will result in financial impacts estimated at $175 million.
The most recent analyst rating on (AU:QAN) stock is a Buy with a A$8.50 price target. To see the full list of analyst forecasts on Qantas Airways Limited stock, see the AU:QAN Stock Forecast page.
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.