Why Qantas and oOh!Media shares took a big hit today

With the ASX 200 Index again falling heavily today, let's examine two ASX shares that have seen particularly sharp falls.

| More on:
a woman

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

With the S&P/ASX 200 Index (INDEXASX: XJO) falling heavily again today, let's examine two ASX shares that experienced particularly sharp falls and take a look at what drove them lower.

Qantas Airways Limited (ASX: QAN)

Qantas shares took a big 8.09% hit today, closing the week 15.37% lower at $4.66. Since 20 February when the market sell-off gained traction, the Qantas share price has plummetted 30%.

Qantas recently announced temporary reductions to flights across Asia due to a growing decline in passenger demand in the wake of the coronavirus. The company cut 16% of Asia capacity until at least May, impacting flights from Australia to mainland China, Hong Kong, and Singapore.

The company has also made reductions of 5% to Qantas and Jetstar flights between Australia and New Zealand. Additionally, Qantas' only route to mainland China (Shanghai) will remain suspended for the same period.

With the coronavirus crisis worsening over the past week as an increasing number of countries experience major cluster outbreaks, it now appears that the impact on Qantas' international passenger demand will go far beyond Asia. As a result, more reductions may well be likely. Domestic travel is also likely to be hit much harder with more confirmed coronavirus cases being reported in major Australian cities.

Qantas is not the only ASX travel share to come under a lot of pressure lately. Other companies in the firing line include Webjet Limited (ASX: WEB), Corporate Travel Management Ltd (ASX: CTD), and Flight Centre Travel Group Ltd (ASX: FLT).

oOh!Media Ltd (ASX: OML)

The oOh!Media share price fell sharply by 11.15% today to close at $2.39 per share. However, this decline doesn't appear to be linked to any recent announcement.

It is quite possible that as the severity of the impact of the coronavirus worsens, investors are growing increasingly concerned about the advertiser's revenue from its out of home segments, especially on public transport. In addition, as the crisis deepens, this could potentially impact advertising spending in general by large corporations.

Before today, however, the oOh!Media share price had been holding up fairly well in the recent market turmoil compared to the broader S&P/ASX 200 Index (INDEXASX: XJO). Perhaps the sell-off has finally come around to oOh!Media shares, so the extreme market volatility could be another reason for today's falls.

In the company's FY19 results released last month, oOh! reported that overall revenues increased marginally by 1% on FY18, while earnings before interest, tax, depreciation and amortisation (EBITDA) dropped by 5% to $139 million. In FY20, oOh! anticipates underlying EBITDA to come in between a range of $140 million and $155 million.

Motley Fool contributor Phil Harpur owns shares of Corporate Travel Management Limited and Webjet Ltd. The Motley Fool Australia owns shares of and has recommended Corporate Travel Management Limited and Flight Centre Travel Group Limited. The Motley Fool Australia has recommended oOh!Media Ltd and Webjet Ltd. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Share Market News

A susccesful person kicks back and relaxes on a comfy chair
Best Shares

If I could only buy and hold a single ASX share forever, it would be this one

There are two reasons why this stock is my first choice...

Read more »

young woman reviewing financial reports at desk with multiple computer screens
Opinions

Brokers' verdict on 4 popular ASX 200 financial stocks

Financials outperformed every other sector in FY25. What should you do now with these 4 stocks?

Read more »

two colleagues high five each other as they sit side by side at a long desk in front of their laptop computers in an office environment.
Share Gainers

Why Bapcor, Ramelius, Sandfire, and WIA Gold shares are rising today

These shares are having a better day than most on Tuesday. But why?

Read more »

Businessman using a digital tablet with a graphical chart, symbolising the stock market.
Share Market News

Is it too late to invest in the record setting S&P 500 stock gains?

A top broker reveals what to expect next from the surging S&P 500 Index.

Read more »

A young woman holds an open book over her head with a round mouthed expression as if to say oops as she looks at her computer screen in a home office setting with a plant on the desk and shelves of books in the background.
Share Fallers

Why Boss Energy, DroneShield, Greatland, and Viva Energy shares are tumbling today

Let's see why these shares are out of favour with investors on Tuesday.

Read more »

Man smiling at a laptop because of a rising share price.
Broker Notes

4 ASX shares to buy this week: experts

Looking for investment inspiration?

Read more »

Miner and company person analysing results of a mining company.
Energy Shares

Should you buy Boss Energy shares now after Monday's huge sell-off?

Macquarie gives its verdict on Boss Energy shares following Monday’s crash.

Read more »

Excited couple celebrating success while looking at smartphone.
Broker Notes

Macquarie forecasts 28% upside for this ASX All Ords stock

Let's see why the broker is feeling bullish about this name.

Read more »