Airline’s shares flying high
Qantas shares have soared to a record after US investment bank Goldman Sachs upgraded its rating on the airline’s improved earnings growth prospects.
QANTAS shares have soared to a record after US investment bank Goldman Sachs upgraded its rating on the airline’s improved earnings growth prospects.
Qantas shares gained as much as 3.7 per cent to hit $6.15 yesterday after Goldman Sachs upgraded its rating from neutral to buy, and reset the airline’s target price at $6.86, more than 15 per cent higher than its most recent close.
Goldman Sachs analyst Owen Birrell said Qantas remained well placed to capitalise on a forecast recovery in Australian domestic travel.
“In our view, the movement in the share price to date has been largely aligned with the global rerating of peers and is yet to fully capture the earnings potential of the improving domestic demand outlook,” Mr Birrell said.
Qantas shares have soared more than 80 per cent in 2017, as the company’s performance continues to improve under the restructuring strategy of chief executive Alan Joyce.
Qantas made an underlying profit of $1.5 billion in the 2015/16 financial year, the highest in its 97-year history, and followed with an underlying profit of $1.4 billion in 2016/17.
“Combined with the ongoing benefits of the ‘transformation program’ and a benign fuel price environment, we expect to see earnings continue to improve,” Mr Birrell said.