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Qantas Airways Limited (AU:QAN)
ASX:QAN

Qantas Airways Limited (QAN) AI Stock Analysis

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AU

Qantas Airways Limited

(Sydney:QAN)

67Neutral
Qantas Airways shows strong revenue growth and operational efficiency, but faces profitability and leverage challenges. The technical indicators suggest a bearish trend with potential oversold conditions. The valuation appears reasonable, with a modest P/E ratio and an attractive dividend yield. Overall, while financial performance presents risks, valuation and cash flow strengths support a moderate score.
Positive Factors
Earnings Growth
Qantas's loyalty program, one of the world's most diverse, is expected to further boost earnings growth with underlying EBIT expected to reach AUD500-550m.
Market Share
Qantas has increased its market share in both the domestic and international markets due to consolidation in the sector and its stronger financial position.
Shareholder Returns
Resumption of shareholder returns is expected to catalyse share price re-rating, with Qantas having been free cash flow positive for the past quarters.
Negative Factors
Fuel Costs
Higher than expected fuel costs will have a negative impact on profitability, though Qantas is better hedged than most competitors.
Manpower Shortage
Manpower shortage continues to be a limiting factor in the recovery of Qantas’s capacity, driven by a tight labour market and surging travel demand.

Qantas Airways Limited (QAN) vs. S&P 500 (SPY)

Qantas Airways Limited Business Overview & Revenue Model

Company DescriptionQantas Airways Limited (QAN) is Australia's largest domestic and international airline. Founded in 1920, Qantas is a major player in the aviation industry, operating a fleet that services both passenger and cargo transportation. The company is recognized for its premium airline services, providing a range of travel-related products and experiences. Qantas operates through several key segments, including Qantas Domestic, Qantas International, Jetstar Group (its low-cost carrier), and Qantas Loyalty, which manages its frequent flyer program.
How the Company Makes MoneyQantas Airways Limited generates revenue through multiple streams, with the primary sources being passenger ticket sales and freight services. The company earns significant income from its domestic and international flight operations, with additional revenue from its low-cost carrier, Jetstar. Ancillary services such as baggage fees, seat selection, and in-flight sales further contribute to its earnings. Qantas also benefits from its loyalty program, Qantas Frequent Flyer, which provides a steady income through partnerships with retailers, financial institutions, and other service providers. The company engages in strategic alliances and code-sharing agreements to enhance its network and revenue potential. Revenue is also supplemented through engineering services and the sale of frequent flyer points.

Qantas Airways Limited Financial Statement Overview

Summary
Qantas Airways shows a strong recovery in revenue and operational efficiency, yet faces challenges in profitability and maintaining free cash flow. The balance sheet is highly leveraged, presenting potential risks in volatile market conditions. Continued focus on improving profit margins and reducing leverage will be critical for sustained financial health.
Income Statement
72
Positive
Qantas has shown significant improvement in revenue growth, with a 10.7% increase in 2024 compared to 2023. The gross profit margin increased to 53.0% in 2024, indicating improved operational efficiency. However, the net profit margin declined to 5.8% from 8.9% in 2023, suggesting challenges in converting revenue into profit. EBIT and EBITDA margins also showed a decline from the previous year, highlighting some pressure on core earnings.
Balance Sheet
65
Positive
The debt-to-equity ratio improved but remains high at 22.80, which indicates significant leverage and potential financial risk. Return on equity (ROE) is robust at 434.6%, driven by high net income relative to equity, but this is partly due to the low equity base. The equity ratio remains very low at 1.4%, showing limited equity cushion against liabilities.
Cash Flow
68
Positive
Free cash flow decreased significantly, with a 72.7% decline from 2023 to 2024. Operating cash flow remains strong relative to net income, indicating solid cash generation capabilities, despite challenges in maintaining free cash flow levels. The free cash flow to net income ratio is below 1, suggesting that not all earnings are translating into free cash flow.
Breakdown
TTMJun 2024Jun 2023Jun 2022Jun 2021Jun 2020
Income StatementTotal Revenue
22.94B21.62B19.52B8.22B5.38B13.84B
Gross Profit
7.52B11.46B4.85B-1.12B-991.00M1.12B
EBIT
7.26B2.18B2.71B-2.35B-1.91B-688.00M
EBITDA
3.80B3.90B4.60B1.04B-176.00M-334.00M
Net Income Common Stockholders
1.30B1.25B1.75B-860.00M-1.69B-1.96B
Balance SheetCash, Cash Equivalents and Short-Term Investments
3.06B1.98B3.17B3.34B2.22B3.52B
Total Assets
20.43B20.56B20.35B19.65B17.81B20.03B
Total Debt
0.006.59B6.73B7.23B8.23B8.54B
Net Debt
-3.06B4.87B3.56B3.89B6.01B5.01B
Total Liabilities
14.44B20.27B20.34B19.84B17.36B18.50B
Stockholders Equity
5.99B289.00M5.00M-197.00M440.00M1.52B
Cash FlowFree Cash Flow
1.43B680.00M2.49B1.75B-1.15B-514.00M
Operating Cash Flow
4.17B3.35B5.05B2.65B-407.00M1.03B
Investing Cash Flow
-2.87B-2.89B-2.59B-225.00M-701.00M-1.52B
Financing Cash Flow
-521.00M-2.01B-2.63B-1.31B-181.00M1.85B

Qantas Airways Limited Technical Analysis

Technical Analysis Sentiment
Neutral
Last Price8.60
Price Trends
50DMA
8.96
Negative
100DMA
8.92
Negative
200DMA
7.92
Positive
Market Momentum
MACD
-0.15
Negative
RSI
47.46
Neutral
STOCH
57.14
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AU:QAN, the sentiment is Neutral. The current price of 8.6 is below the 20-day moving average (MA) of 8.67, below the 50-day MA of 8.96, and above the 200-day MA of 7.92, indicating a neutral trend. The MACD of -0.15 indicates Negative momentum. The RSI at 47.46 is Neutral, neither overbought nor oversold. The STOCH value of 57.14 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for AU:QAN.

Qantas Airways Limited Peers Comparison

Overall Rating
UnderperformOutperform
Sector (63)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
AUWEB
69
Neutral
$1.51B6.437.70%-8.24%332.82%
AUQAN
67
Neutral
$12.93B10.19321.42%3.89%9.24%-7.82%
AUALL
66
Neutral
AU$40.07B31.3719.74%1.21%4.89%-7.96%
63
Neutral
$4.27B11.405.38%214.63%4.11%-8.98%
AUFLT
61
Neutral
$2.77B24.099.61%3.40%7.22%-28.93%
AUQFE
42
Neutral
AU$24.95M-37.01%32.38%69.11%
* Industrials Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
AU:QAN
Qantas Airways Limited
8.60
2.94
51.89%
AU:FLT
Flight Centre Travel Group Limited
12.46
-8.27
-39.89%
AU:ALL
Aristocrat Leisure Limited
64.25
25.05
63.92%
AU:WEB
Webjet Limited
4.19
-3.06
-42.22%
AU:QFE
QuickFee Ltd.
0.07
-0.02
-22.22%

Qantas Airways Limited Earnings Call Summary

Earnings Call Date: Feb 26, 2025 | % Change Since: -0.57% | Next Earnings Date: Aug 28, 2025
Earnings Call Sentiment Positive
The earnings call highlighted strong financial performance, particularly in the Jetstar and Loyalty segments, along with significant investment in fleet renewal. However, challenges remain in Qantas International earnings and cost management. Overall, the positive aspects of growth and operational improvements outweigh the negatives.
Highlights
Strong Financial Performance
Qantas announced an underlying profit of $2.08 billion for FY 2024, with an underlying EPS of $0.88 per share. Statutory profit after tax was $1.25 billion.
Jetstar Record Results
Jetstar reported an underlying EBIT of $497 million, up 23% from the prior year, driven by strong demand for low-fare travel and the introduction of new A321LRs.
Qantas Loyalty Growth
Qantas Loyalty delivered an underlying EBIT of $511 million, with total points earned and redeemed growing at double-digit rates. Active membership increased by 19%.
Fleet Renewal and Investment
Qantas is on track to receive over 40 new aircraft in the next two years. The group invested $3.1 billion in CapEx in FY 2024.
Operational Improvements
The group saw an increase in on-time performance and NPS, with Qantas Domestic reporting a 24-point jump in NPS.
Lowlights
Decline in Qantas International Earnings
Qantas International, including freight, recorded an underlying EBIT of $556 million, with declines driven by reduced freight yields and increased market capacity.
Challenges in Cost Management
The group faced increased costs due to customer investments, inefficiencies from delayed fleet exits, and legal provisions.
Impact of ACCC Settlement and Legal Provisions
Statutory profit was impacted by one-off costs from the ACCC settlement and legal provisions related to ground handling.
Company Guidance
In the Qantas Airways Q4 2024 earnings call, the company reported a strong financial performance, highlighted by an underlying profit of $2.08 billion and an underlying EPS of $0.88 per share. The statutory profit after tax was $1.25 billion, illustrating a decline due to factors such as the ACCC settlement and legal provisions. The group's operating margin stood at 10.4%, maintaining its position as one of the strongest globally in the airline industry. Net debt was reported at $4.1 billion, at the lower end of the group's target range, and operating cash flow was robust at $3.4 billion. The company outlined a $3.1 billion investment in CapEx across fleet and projects, with 16 new aircraft joining the fleet. Jetstar achieved a record underlying EBIT of $497 million, up 23% year-on-year, driven by strong demand for low-fare travel and the introduction of new A321LR aircraft. Qantas Domestic recorded an underlying EBIT of $1.06 billion, while Qantas International, including freight, reported an underlying EBIT of $556 million. The group also announced a new $400 million share buyback and plans to reinstate a fully franked base dividend in the second half, pending board approval.

Qantas Airways Limited Corporate Events

Qantas Airways Updates Sydney Registry Office Address
Apr 14, 2025

Qantas Airways Limited announced a change in the address of its registry office in Sydney, effective from April 14, 2025. The registry, managed by MUFG Corporate Markets (AU) Limited, has moved to a new location at Liberty Place, Level 41, 161 Castlereagh St, Sydney NSW 2000. This change does not affect the mailing address, email, or telephone contact details for Qantas shareholders, ensuring continuity in communication and operations.

Qantas Airways Announces Cessation of Performance Rights
Apr 8, 2025

Qantas Airways Limited announced the cessation of 204,464 performance rights due to the lapse of conditional rights, as the conditions were not met by the specified date. This cessation reflects on the company’s capital management strategies and may impact stakeholders’ perception of the company’s operational performance and future growth prospects.

Qantas Issues Performance Rights to Employees
Apr 8, 2025

Qantas Airways Limited announced the issuance of 121,000 performance rights under an employee incentive scheme. These securities are unquoted and subject to transfer restrictions, reflecting the company’s strategy to incentivize and retain key personnel, potentially impacting its operational efficiency and stakeholder engagement.

Qantas Airways Appoints Dion Weisler as New Director
Mar 30, 2025

Qantas Airways Limited has announced the appointment of Dion Weisler as a new director, effective from March 31, 2025. Weisler holds 20,000 ordinary shares through Dish Nominees Pty Ltd, a private investment entity for his family. This appointment is part of Qantas’s ongoing efforts to strengthen its leadership team, potentially impacting its strategic direction and stakeholder interests.

Qantas Announces Strategic Board Changes with New Appointment
Mar 30, 2025

Qantas Airways Limited has announced the appointment of Dion Weisler as an independent Non-Executive Director, emphasizing its commitment to board renewal and enhancing its governance. Weisler, with his extensive experience in global technology companies, is expected to contribute significantly to Qantas’s digital transformation initiatives and help navigate challenges such as AI and cyber threats. Additionally, Todd Sampson will retire from the board after over a decade of service, marking a period of significant board refreshment. These changes are part of Qantas’s strategy to strengthen its position and regain trust as a leading Australian brand.

Qantas Maintains Steady Shareholding Control
Mar 17, 2025

Qantas Airways Limited has announced that there has been no change in the aggregated percentage of voting shares controlled by its entities, maintaining a 0.05% stake. This stability in shareholding indicates a steady control over its voting rights, suggesting no immediate impact on its corporate governance or stakeholder interests.

Qantas Updates Dividend Distribution Details
Mar 12, 2025

Qantas Airways Limited announced an update to its previous notification regarding the dividend distribution for the period ending December 31, 2024. The update specifically addresses the total equivalent amount per share in NZD currency, reflecting changes in the financial details of the distribution.

Qantas Releases HY25 Investor Presentations
Feb 27, 2025

Qantas Airways Limited has released its HY25 Investor Presentations, which were lodged electronically with the Australian Securities Exchange. The presentations provide insights into the company’s financial performance and strategic direction for the first half of 2025. This release is significant for stakeholders as it outlines the company’s operational strategies and potential market impacts, reflecting Qantas’s ongoing efforts to maintain its competitive position in the aviation industry.

Qantas Reports Strong Financial Performance and Announces Fleet Investments
Feb 26, 2025

Qantas Group reported a strong financial performance for the half year ending December 2024, with an 11% increase in Underlying Profit Before Tax to $1.39 billion and a 6% rise in Statutory Profit After Tax to $923 million. This growth was driven by robust demand across all customer segments, with Qantas and Jetstar carrying 10% more customers. The company is investing in fleet renewal, introducing new aircraft like the Airbus A321LR and A320neo, which have improved fuel efficiency and customer satisfaction. Qantas is also enhancing its existing fleet with cabin upgrades to improve the flying experience. The company announced dividends for the first time since FY19, reflecting its financial strength. Despite higher costs due to supply chain issues and regulatory impacts, Qantas remains focused on transformation and customer satisfaction, aiming to rebuild trust and deliver a seamless travel experience.

Qantas Airways Announces Dividend Distribution for Shareholders
Feb 26, 2025

Qantas Airways Limited has announced a dividend distribution of AUD 0.264 per share for its ordinary fully paid securities. The dividend relates to the six-month period ending December 31, 2024, with an ex-date of March 11, 2025, a record date of March 12, 2025, and a payment date set for April 16, 2025. This announcement reflects Qantas’s financial performance and commitment to returning value to its shareholders, potentially impacting its market positioning and stakeholder confidence.

Qantas Airways Faces Changes in Substantial Holdings
Jan 30, 2025

Qantas Airways Limited has experienced a change in the interests of its substantial holders, as reflected in the latest notice pertaining to voting securities. State Street Global Advisors and its subsidiaries have updated their holdings and voting power, showcasing a significant presence in Qantas’ shares. This development may affect the company’s governance and investor dynamics, potentially influencing strategic decisions and stakeholder relations.

Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.