This report is an updated version of the report published on 10 April 2024 at 1:56 PM AEST.
Qantas Airways Limited (ASX: QAN)
Qantas Airways Limited (ASX: QAN) operates in the aviation industry, providing airline services for international and domestic travel. The company is also engaged in providing freight services.
Recommendation Rationale – SELL at AUD 5.960
- Profit Booking: QAN’s share price surpassed Resistance 1 level recommended on 25 March 2024; and thus, offered a profit booking opportunity.
- Financial Performance: For 1HFY24, QAN reported a 13% YoY decline in statutory profit after tax to AUD 869mn. The company continued its investment in customers and new aircraft during the period.
- Outlook: Amid growing travel demand, QAN expects unit revenue to remain stable for domestic market. Unit revenue is anticipated to continue to normalise for international domain as market capacity returns.
- Key Risks: QAN’s performance is susceptible to regulatory risks, uncertain macroeconomic events, high crude prices, among others.
- Overvalued Multiples: On a forward 12-month basis, key valuation multiple, Price/Book Value is higher than median of the airlines industry.
QAN Daily Chart
(Source: REFINITIV; Analysis by Kalkine Group)
Given its current trading levels, recent rally in the share price, and risks associated, it is prudent to book profit at the current levels. Hence, a ‘Sell’ recommendation is given on the stock at the current market price of AUD 5.960, at 1:50 PM AEST, as of 10 April 2024.
Markets are trading in a highly volatile zone currently due to certain macro-economic issues and geopolitical issues prevailing geopolitical tensions. Therefore, it is prudent to follow a cautious approach while investing.
Note 1: Past performance is neither an indicator nor a guarantee of future performance.
Note 2: The reference date for all price data, currency, technical indicators, support, and resistance levels is 12 April 2024. The reference data in this report has been partly sourced from REFINITIV.
Note 3: Investment decisions should be made depending on an individual's appetite for upside potential, risks, holding duration, and any previous holdings. An 'Exit' from the stock can be considered if the Target Price mentioned as per the Valuation and or the technical levels provided has been achieved and is subject to the factors discussed above.
Technical Indicators Defined: -
Support: A level at which the stock prices tend to find support if they are falling, and downtrend may take a pause backed by demand or buying interest.
Resistance: A level at which the stock prices tend to find resistance when they are rising, and uptrend may take a pause due to profit booking or selling interest.
Stop-loss: In general, it is a level to protect further losses in case of any unfavourable movement in the stock prices.