Shares of the ASX-listed Qantas Airways Limited (AU:QAN) gained 1.52% today after the airline upgraded its domestic revenue forecast for the first half of FY25. It also projected lower fuel bills amid a decline in global oil prices. According to the update, Qantas stated that its first-half trading is in line with expectations. The airline’s low-cost brand, Jetstar, experienced higher-than-expected demand, while Qantas Domestic reported improved load factors and growing corporate travel demand year-over-year.
The stock rally followed a 3.4% gain on Wednesday after Jefferies raised its price target for QAN stock. Jefferies predicts a 31.5% upside in Qantas shares based on a positive outlook for the airline’s future profitability.
Qantas Airways is Australia’s national airline and operates the country’s largest aircraft fleet.
Qantas Raises Revenue Forecast, Cuts Fuel Cost Outlook
Qantas raised its RASK (revenue per available seat kilometer) forecast for H1 FY25, backed by stable demand across segments. It now expects its RASK to grow by 3% to 5% as compared to the 2% to 4% range projected in August.
Speaking of costs, Qantas now expects first-half jet fuel costs of AU$2.55 billion, down from its earlier estimate of AU$2.7 billion. This revision reflects current jet fuel prices of AU$140 per barrel, compared to the previous assumption of AU$150.
Additionally, the airline stated that it completed 45% of its AU$400 million share buyback announced with its FY24 results in August. It expects to complete the buyback before December 31, 2024.
Is Qantas a Good Share to Buy Now?
According to TipRanks, QAN stock has received a Strong Buy rating, backed by nine Buy and two Hold recommendations. The Qantas share price prediction is AU$7.86, which is 2% below the current trading level.
Year-to-date, QAN stock has gained over 50%.
