Can the Qantas (ASX:QAN) share price soar even higher?

Could the Qantas Airways Limited (ASX:QAN) share price soar even higher in the coming months following the travel bubble announcement?

| More on:
view from below of jet plane flying above city buildings representing corporate travel share price

Image source: Getty Images

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

The Qantas Airways Limited (ASX: QAN) share price was on form on Tuesday and charged higher.

The airline operator's shares ascended over 3% to close the day at $5.26.

Why did the Qantas share price take off?

Investors were buying Qantas and other travel shares on Tuesday following the announcement of an Australia-NZ travel bubble.

This travel bubble will allow travellers from either side of the Tasman to visit without a 14-day COVID-19 quarantine period. It is due to open in less than two weeks on 18 April.

Is it too late to invest?

According to a note out of Goldman Sachs, it isn't too late to invest.

This morning the broker reiterated its buy rating and $6.38 price target on the airline operator's shares.

Based on the current Qantas share price, this price target implies potential upside of 21% over the next 12 months.

What did Goldman say?

Goldman Sachs was pleased with the news, noting that this would be a big boost to its international business. Particularly given how New Zealand accounted for ~13% of international passengers and ~5% of total passengers pre-COVID.

Its analysts said: "The announcement would add international volumes which has remained minimal given international border restrictions. Pre-Covid (CY19), New Zealand accounted for c. 13% of international pax (c. 5% of total pax) for Qantas group. It is difficult to forecast the recovery volume, but we highlight that with additional routes and capacity, and while other international destinations remain closed, it could present upside to pre-Covid levels."

In light of this, the broker continues to believe that Qantas is a great COVID recovery investment option for investors.

"We reiterate our Buy rating on QAN.AX. QAN represents a strong recovery investment, if the Australian COVID-19 vaccination program has the effect of reducing community transmission of the virus and limits the need for domestic border closures," Goldman concluded.

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Broker Notes

Four people on the beach leap high into the air.
Broker Notes

4 ASX All Ords shares offering 10% to 30% annual growth: brokers

These ASX All Ords stocks have caught the eye of brokers this week.

Read more »

A young woman lifts her red glasses with one hand as she takes a closer look at news about interest rates rising and one expert's surprising recommendation as to which ASX shares to buy
Broker Notes

Top brokers name 3 ASX shares to buy today

Here's what brokers are recommending as buys this week.

Read more »

A man holding a cup of coffee puts his thumb up and smiles while at laptop.
Broker Notes

Here are 2 ASX shares that Morgans rates as buys

Let's see why the broker is feeling bullish on these stocks.

Read more »

A smiling businessman in the city looks at his phone and punches the air in celebration of good news.
Broker Notes

Guess which ASX 200 stock was just upgraded to a buy rating

Why did the broker just turn bullish? Let's find out.

Read more »

Two brokers analysing stocks.
Broker Notes

Don't miss these changes to broker ratings on ASX shares

The verdicts are in.

Read more »

Broker written in white with a man drawing a yellow underline.
Broker Notes

Leading brokers name 3 ASX shares to buy today

Here's why brokers believe that now could be the time to snap up these stocks.

Read more »

man thinking about whether to invest in bitcoin
Broker Notes

Why now is the time to buy this beaten down $8b ASX 200 stock

Goldman Sachs thinks that now is the time to invest in this beaten down drinks giant.

Read more »

a man sits alone in his house with a dejected look on his face as he looks at a glass of red wine he is holding in his hand with an open bottle on the table in front of him.
Broker Notes

Red alert! 4 ASX All Ords shares just got broker downgrades

These ASX All Ords stocks have caught the attention of brokers for all the wrong reasons.

Read more »