Qantas Airways Limited (QAN) AI Stock Analysis

• Market Cap: $15.95B
• Dividend Yield: 2.5%
• Average Volume (3M): 3.90M
• Price to Earnings (P/E): 12.6
• Beta (1Y): 1.17
• Revenue Growth: 9.24%
• EPS Growth: -7.82%
• Country: AU
• Employees: 20,000
• Sector: Industrials
• Sector Strength: 95
• Industry: Airlines, Airports & Air Services
• EPS (TTM): 0.63
• Shares Outstanding: 1,513,199,200
• 10 Day Avg. Volume: 3,731,723
• 30 Day Avg. Volume: 3,897,137
• PEG Ratio: 1.30
• Price to Book (P/B): 20.83
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 10.39
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $11.68
• Price Target Upside: 9.58% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 3

• Rating: 68 Neutral
• Price Target: ―

Qantas Airways demonstrates a strong revenue recovery and operational efficiency improvements. However, challenges in profitability and a highly leveraged balance sheet pose risks. The technical analysis shows slight bearish momentum, while the stock valuation is attractive with a low P/E ratio and a decent dividend yield. Overall, Qantas presents a mixed investment opportunity with potential for growth if profitability and leverage are addressed.

Positive Factors

Earnings Growth

Qantas's loyalty program, one of the world's most diverse airline loyalty programmes, is expected to further boost earnings growth with underlying EBIT expected to reach AUD500-550m in FY24F.

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.

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 Business Overview & Revenue Model

Company Description

Qantas 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 Money

Qantas 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, which presents a potential risk in volatile market conditions. Continued focus on improving profit margins and reducing leverage will be critical for sustained financial health.

Income Statement

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

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

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
TTM	Jun 2024	Jun 2023	Jun 2022	Jun 2021	Jun 2020
Income Statement		Total Revenue
22.94B	21.62B	19.52B	8.22B	5.38B	13.84B
	Gross Profit
7.52B	11.46B	4.85B	-1.12B	-991.00M	1.12B
	EBIT
7.26B	2.18B	2.71B	-2.35B	-1.91B	-688.00M
	EBITDA
3.80B	3.90B	4.60B	1.04B	-176.00M	-334.00M
	Net Income Common Stockholders
1.30B	1.25B	1.75B	-860.00M	-1.69B	-1.96B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
2.34B	1.98B	3.17B	3.34B	2.22B	3.52B
	Total Assets
21.83B	20.56B	20.35B	19.65B	17.81B	20.03B
	Total Debt
7.23B	6.59B	6.73B	7.23B	8.23B	8.54B
	Net Debt
4.89B	4.87B	3.56B	3.89B	6.01B	5.01B
	Total Liabilities
21.09B	20.27B	20.34B	19.84B	17.36B	18.50B
	Stockholders Equity
738.00M	289.00M	5.00M	-197.00M	440.00M	1.52B
Cash Flow		Free Cash Flow
1.43B	680.00M	2.49B	1.75B	-1.15B	-514.00M
	Operating Cash Flow
4.17B	3.35B	5.05B	2.65B	-407.00M	1.03B
	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	-181.00M	1.85B

Qantas Airways Limited Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 10.66
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AU:QAN, the sentiment is Positive. The current price of 10.66 is above the 20-day moving average (MA) of 10.13, above the 50-day MA of 9.32, and above the 200-day MA of 8.43, indicating a bullish trend. The MACD of 0.39 indicates Negative momentum. The RSI at 79.10 is Negative, neither overbought nor oversold. The STOCH value of 90.00 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for AU:QAN.

Qantas Airways Limited Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
AQZ	74 Outperform	AU$410.43M	6.51	15.44%	―	16.98%	12.16%
QAN	68 Neutral	$15.95B	12.58	321.42%	2.50%	9.24%	-7.82%
Sector *	65 Neutral	$4.45B	12.15	5.28%	248.12%	4.08%	-12.23%

Qantas Airways Limited Corporate Events

Qantas Airways Updates Sydney Registry Office Address

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

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

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

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

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

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

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.