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Wondering whether Qantas Airways at around A$9.67 is offering you good value, or if the easy gains are already behind it? This article is designed to help you frame that question clearly. The share price has been under pressure recently, with a 10% decline over the last 7 days, 5.5% over the last 30 days and 7.8% year to date, even though the 1 year, 3 year and 5 year returns sit at 8.4%, 55.9% and 100.3% respectively. These mixed returns come as Qantas continues to sit at the center of investor conversations about the aviation sector and domestic travel, with regular headlines about competition, capacity, and customer sentiment. Taken together, this context helps explain why expectations and risk perceptions can shift even when the long term track record looks strong on paper. On our valuation checks, Qantas Airways scores a perfect 6 out of 6. Next we will walk through what that means across different valuation approaches, before finishing with a way of looking at value that goes beyond any single model.

Find out why Qantas Airways's 8.4% return over the last year is lagging behind its peers.

Approach 1: Qantas Airways Discounted Cash Flow (DCF) Analysis

A Discounted Cash Flow model takes projected future cash flows and discounts them back to today to estimate what the business might be worth right now in A$ terms.

For Qantas Airways, the latest twelve month free cash flow is a cash outflow of A$140.4 million. Analysts have specific forecasts out to 2028, with free cash flow for the year to 30 June 2028 projected at A$952.5 million. Beyond those analyst years, Simply Wall St extrapolates further, with ten year projections that reach into the low A$ billions by the mid 2030s.

Bringing all of those projected cash flows back to today using a 2 Stage Free Cash Flow to Equity model results in an estimated intrinsic value of A$34.62 per share. Compared to a current share price of around A$9.67, this DCF estimate suggests the stock is trading at roughly a 72.1% discount, which is a wide gap.

Result: UNDERVALUED

Our Discounted Cash Flow (DCF) analysis suggests Qantas Airways is undervalued by 72.1%. Track this in your watchlist or portfolio, or discover 9 more high quality undervalued stocks.QAN Discounted Cash Flow as at Feb 2026

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Qantas Airways.

Approach 2: Qantas Airways Price vs Earnings

For profitable companies, the P/E ratio is a useful way to see how much you are paying for each dollar of earnings, which makes it a straightforward cross check against the DCF work you saw earlier.

Story Continues

What counts as a "normal" P/E depends on how the market sees growth potential and risk. Companies with stronger expected growth or more predictable earnings often trade on higher P/E multiples, while those seen as riskier or with lower expected growth tend to sit on lower P/Es.

Qantas Airways currently trades on a P/E of 8.9x. That sits below the Airlines industry average of 10.5x and well below the broader peer group average of 24.0x. On the surface, that suggests the market is pricing Qantas more cautiously than many peers.

Simply Wall St's Fair Ratio for Qantas is 20.3x. This is a proprietary estimate of what the P/E could be, given factors such as earnings growth, industry, profit margins, market cap and company specific risks. Because it adjusts for these fundamentals, the Fair Ratio can be more tailored than a simple comparison with peers or an industry average.

Comparing the current P/E of 8.9x to the Fair Ratio of 20.3x, the shares screen as undervalued on this measure.

Result: UNDERVALUEDASX:QAN P/E Ratio as at Feb 2026

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Upgrade Your Decision Making: Choose your Qantas Airways Narrative

Earlier we mentioned that there is an even better way to understand valuation, so let us introduce you to Narratives, which are simply your own story about Qantas Airways, linked to a set of numbers like future revenue, earnings, margins and an assumed fair value, then compared against the current price to help you judge whether the stock looks attractive or not.

On Simply Wall St, Narratives sit inside the Community page and are used by millions of investors as an easy way to connect a company’s story to a financial forecast. Instead of only looking at a P/E or DCF output, you are seeing how your assumptions about things like fleet renewal, loyalty earnings or competition flow through into an estimated fair value.

These Narratives update automatically when new information arrives, such as earnings releases or news, so your fair value and thesis stay in sync with the latest data rather than being a one off exercise that quickly goes out of date.

For Qantas Airways, one investor currently has a fair value of A$8.88 while another has A$12.21. That spread captures how two people can look at the same business, plug in different expectations for revenue growth, profit margins and discount rates, and reach very different views on whether today’s price looks attractive or not.

For Qantas Airways however we will make it really easy for you with previews of two leading Qantas Airways Narratives:

First up is a bullish view that leans into fleet renewal, loyalty and earnings growth, and then a more cautious view that leans into cyclicality, normalising margins and industry risks. Reading both can help you decide which story feels closer to your own.

🐂 Qantas Airways Bull Case

Fair value in this bullish narrative: A$12.21 per share

Implied discount to this fair value versus A$9.67: about 20.8% undervalued using ((12.21 minus 9.67) divided by 12.21)

Revenue growth assumption: about 5.8% a year

Fleet renewal, customer experience spending and the dual Qantas and Jetstar brand approach are all expected to support higher margins and earnings over time. The Qantas Loyalty program is treated as a key profit driver, with products like Classic Plus seen as supportive of high margin revenue from partners and members. Analysts in this camp see the current price as close to fair, based on A$28.1b of revenue, A$2.1b of earnings and a P/E of about 10.6x by 2028, using an 8.6% discount rate as a cross check.

🐻 Qantas Airways Bear Case

Fair value in this more cautious narrative: A$8.88 per share

Implied premium to this fair value versus A$9.67: about 8.9% overvalued using ((9.67 minus 8.88) divided by 8.88)

Revenue growth assumption: about 4.8% a year

This thesis treats Qantas as a stronger business than before COVID, but assumes earnings and margins settle at a more normal level after the post reopening surge. It leans on a DCF style view that builds in load factors, ticket pricing, fuel costs and long term growth, with particular focus on the cyclical nature of aviation. Key risks in focus are fuel prices, labour and wage pressures, economic slowdown, regulatory pressure and the possibility that the share price already reflects a full set of optimistic assumptions.

Putting these side by side, you can see how two sets of reasonable assumptions about growth, margins, discount rates and P/E multiples turn into very different fair values, even using the same starting share price of A$9.67.

If you want to go deeper into either story, the full Narratives on Simply Wall St let you see all the inputs behind each fair value, then adjust the numbers to line up with your own expectations for Qantas Airways.

Curious how numbers become stories that shape markets? Explore Community Narratives

Do you think there's more to the story for Qantas Airways? Head over to our Community to see what others are saying!ASX:QAN 1-Year Stock Price Chart

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Companies discussed in this article include QAN.AX.

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