Qantas Airways: Fairly Valued On Higher Earnings Expectations

2025-05-11 04:35:49 ET

Summary

• Qantas' H1 2025 revenues grew 9% to A$12.1 billion, driven by capacity increases and lower fuel costs, despite unit revenue pressures and inflation.
• The company expects double-digit EBIT growth for H2 2025, with strong domestic unit revenues and increased capacity, despite rising net debt due to fleet expansion.
• Qantas stock is fairly valued, with recent price increases, driven by higher EBITDA and free cash flow expectations, already priced into the market.
• Maintaining a hold rating, I see potential upside if FY27 earnings are priced in or valuation multiples align more closely with peers.

Qantas Airways Limited ( QUBSF ) (QABSY) provided its H1 2025 earnings in February. The stock price rose in response to the earnings release, but moderated following increasing geopolitical and trade tensions. The stock price has increased 7% since then on the ASX where it trades under the ticker QAN , which provides the most liquid investing opportunity, and rose around 10% denominated in USD....

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