The Qantas Airways Limited (ASX: QAN) share price has been a strong performer over the last 30 days.
Since this time last month the airline operator's shares have rallied a sizeable 16% higher.
Is it too late to invest?
I don't believe it is too late to buy Qantas' shares if you're planning to make a long term investment.
However, it is a reasonably high risk investment due to the uncertainties that it is facing.
One positive, though, is that its recent market update reveals that the company is well-positioned to navigate even the most extreme scenarios. This follows its decision to secure a further $550 million in funding against three of its wholly-owned Boeing 787-9 aircraft.
Management estimates that this gives it enough liquidity to last until at least December 2021 with no changes in current trading conditions. This is based on its expectation that its net cash burn rate will reduce to $40 million per week by the end of June 2020.
I'm optimistic the worst case scenario is very unlikely and expect domestic travel to start recovering in the coming months. And while international travel will inevitably take much longer, I suspect it will begin its recovery long before the end of 2021.
What are brokers saying?
Many of Australia's leading brokers have responded to Qantas' market update.
A note out of Citi reveals that its analysts have retained their buy rating and $3.70 price target on the company's shares.
Morgan Stanley is another broker that remains positive on the investment opportunity here. It has retained its overweight rating and $5.70 price target on its shares. It was pleased to see how quickly Qantas can ramp up capacity when necessary.
One broker that isn't positive on Qantas is Credit Suisse. It has retained its underperform rating and lowly $2.20 price target on the airline's shares. It expects the recovery in demand to be volatile and suspects Virgin Australia Holdings Limited (ASX: VAH) could come back from administration as a stronger competitor.
Overall, at this point I would side more with Citi and Morgan Stanley and be a buyer of its shares. But due to the risks involved, I would restrict an investment to just a small part of my portfolio.
