It has been a disappointing 12 months for the Qantas Airways Limited (ASX: QAN) share price.
A decline of around 1.5% to $5.65 on Thursday means the airline operator's shares have now lost 6.5% of their value since this time last year and are down over 18% from the 52-week high of $6.92 they reached in August.
Is this a buying opportunity?
I think that Qantas' shares are trading at an attractive level and could be worth considering, just as long as oil prices don't rise materially from here.
One broker that agrees with this view is Goldman Sachs.
A note out of the investment bank earlier this week following the release of the latest Bureau of Infrastructure, Transport and Regional Economics (BITRE) data reveals that its analysts still have Qantas on their conviction buy list with a $6.93 price target.
This price target implies potential upside of almost 23% for its share price over the next 12 months.
According to the note, the latest BITRE data showed solid passenger volumes in the month of January despite adverse trading conditions.
International passenger numbers rose 4% on the prior corresponding period and seat utilisation increased to 84.1%. The latter was a 2.2 percentage point increase on the prior corresponding period and is expected to boost its revenue per available seat (RASK).
This appears to support Goldman's view that the company is well-positioned to deliver a strong second half thanks to positive forward bookings, effective capacity management, and transformation benefits.
Goldman isn't quite as positive on rival Virgin Australia Holdings Ltd (ASX: VAH). It has retained its neutral rating and 19 cents price target on its shares, believing that Qantas is the better option for investors due to its superior strategic flexibility.
But another tourism share that Goldman Sachs likes is Sydney Airport Holdings Pty Ltd (ASX: SYD). It has a buy rating and $7.80 price target on the airport operator's shares.
