Analysts are lifting their valuations for the airline to north of $7 per share after its $1.3 billion earnings forecast.
Barrenjoey analysts have upped their valuation of Qantas, saying the airline’s guidance update shows it can absorb a “slowdown in consumer spend better than the market fears” as
“We have capacity at 80 per cent of pre-COVID levels in FY23 while demand is closer to 100 per cent,” the analyst said.“Time will tell but ... this should give Qantas some leverage to absorb a potential slowdown and given the lead time coming into a slowdown, the company is better placed to deal with this slowdown than in prior periods.”
While Qantas did not reveal how it would solve any deterioration in demand, chief executive Alan Joyce said the company would keep a lid on capacity to ensure service levels were increased after a horror start to the year saw too many flights cancelled or delayed and a rise in lost baggage.“Maintaining our pre-COVID service levels requires a lot more operational buffer than it used to,” Mr Joyce said on Thursday.
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