UAL - Qantas Trades At A Discount, But I Am Downgrading

2025-02-03 18:10:19 ET

Summary

• Qantas Airways Limited stock has climbed 29% since my buy rating in September 2024, outperforming the S&P 500's 7.4% return.
• Qantas updated its domestic unit revenue guidance to 3-5% and reduced capacity growth outlook for both domestic and international markets.
• The stock is fairly valued with just a 4% upside, factoring in currency fluctuations and revised EBITDA and free cash flow estimates.
• Due to revised capacity guidance and potential currency risks, I have downgraded QUBSF stock from buy to hold, awaiting stronger H1 2025 results.

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