Top broker tips 17% upside for Qantas shares following Airbus order

Could the Qantas share price have another dollar in its back pocket?

| More on:
Two people in first class of an aeroplane share advice over the aisle of the plane.

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

Key points

  • Top broker Jefferies has slapped the Qantas share price with a buy rating and a $6.81 price target, representing a 17% upside
  • It comes after Australia's flagship airline announced it expects to return to profitability next financial year and is gearing up to launch non-stop flights from Sydney to London aboard new Airbus aircraft in 2025
  • The broker now expects Qantas to report a net loss of $1.28 billion for this financial year and a $703.3 million net profit for financial year 2023

The Qantas Airways Limited (ASX: QAN) share price has lifted nearly 5% this week following the company's update on its pandemic recovery.

Additionally, the iconic airline announced it has ordered 12 new Airbus A350s. The new aircraft will be ready for take-off from Sydney in 2025.

On the back of the news, broker Jefferies upgraded its price target for the Qantas share price. It's predicting the stock has 17% upside, according to Reuters.

At the time of writing, the Qantas share price is $5.81, 0.17% higher than its previous close.

For context, the S&P/ASX 200 Index (ASX: XJO) has also spent Wednesday morning in the green, having gained 0.27%.

Let's take a closer look at why the broker thinks the 'flying kangaroo' is facing a green future.

Could the Qantas share price reach $6.81?

Jefferies is expecting big things from the Qantas share price after the airline announced it could return to profitability next financial year.

It's also more bullish on the stock following news the airline is bolstering its international fleet with the intention to fly non-stop from Sydney to London and New York from 2025.

Finally, Qantas' expectation of further growth in both its earnings and demand has boosted the broker's confidence.  

The airline believes its domestic capacity will be 105% of its pre-pandemic levels in the quarter ending 30 June and around 110% of pre-pandemic levels in the quarter ending 30 September.

Meanwhile, it's predicting its international capacity will be bolstered to just under 50% of pre-pandemic levels this quarter. That's expected to rise to 70% in the first quarter of next financial year.

Jefferies also believes the airline's two concurrent projects – Winton and Sunrise – will cement its solid market position.

Winton aims to renew Qantas' domestic fleet. The airline has ordered 40 aircraft under the project. The first of the planes are set to arrive next year.

Meanwhile, Sunrise is working to see non-stop flights operate from Sydney to London.

Jefferies is reportedly gearing up for Qantas to report a net loss of $1.28 billion for financial year 2022.

That's down from its previous estimate of $1.49 billion and last financial year's $2.28 billion pre-tax loss.

Additionally, it expects Qantas to report a net profit of $703.3 million for financial year 2023 – up from its previous expectation of a $688.8 million profit.

As a result, the broker has slapped the Qantas share price with a price target of $6.81 and a buy rating.

Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. 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 Scott Phillips.

More on Broker Notes

A bland looking man in a brown suit opens his jacket to reveal a red and gold superhero dollar symbol on his chest.
Broker Notes

Bell Potter names the best ASX 200 stocks to buy in June

The broker is feeling bullish on these names this month. Let's find out why.

Read more »

Man drawing an upward line on a bar graph symbolising a rising share price.
Broker Notes

Bell Potter says this ASX 200 share can rise 25%

Let's see what the broker is saying about this stock.

Read more »

Stethoscope with a piggy bank in the middle.
Broker Notes

Australian health insurance: Does Macquarie prefer Medibank or NIB shares?

Medibank and NIB shares have both surged in 2025. Here’s what Macquarie expects now.

Read more »

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

9 ASX 200 shares just upgraded to strong buy ratings

Brokers have upgraded these shares amid expectations of price growth over the next 12 months.

Read more »

Red sell button on an Apple keyboard.
Broker Notes

Sell alert! Brokers say pull the plug on these 3 ASX 200 shares

Experts say it's time to press the sell button on these ASX 200 shares. Find out why.

Read more »

Overjoyed man celebrating success with yes gesture after getting some good news on mobile.
Broker Notes

Macquarie forecasts 40% upside for this ASX All Ords stock

Let's see which stock the broker is tipping as a buy.

Read more »

Contented looking man leans back in his chair at his desk and smiles.
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 shares.

Read more »

A smiling woman with a handful of $100 notes, indicating strong dividend payments
Broker Notes

Where to invest $10,000 in ASX 200 shares this month

Brokers think these shares could be top picks for your hard-earned money this month.

Read more »