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Qantas Airways Limited (ASX:QAN) has faced a challenging year, with its shares declining by 11% in 2023. Despite this, several analysts believe there's potential for Qantas shares to rebound and reach new heights in 2024. This analysis provides insights into the performance and future outlook of Qantas shares, offering a perspective within the context of ASX consumer stocks.
Morgans, a particularly optimistic broker, has assigned an "add" rating to Qantas shares, along with a $7.30 price target. This suggests a substantial upside of 36% over the next 12 months. Morgans points out that ASX QAN is currently trading at a significant discount compared to pre-COVID multiples. Despite having structurally higher earnings, a stronger balance sheet, a more favorable domestic market position, and increased diversification, the airline's valuation remains discounted. Morgans anticipates a robust demand for travel post-COVID, supporting further earnings growth in the fiscal years 2024 and 2025.
Goldman Sachs, another bullish broker, maintains a "buy" rating on Qantas shares with a $8.25 price target. This implies a potential upside of 53% from the current levels. Like Morgans, Goldman Sachs emphasizes the market's failure to fully appreciate Qantas' improved earnings capacity. The airline's current market capitalization and enterprise value are notably below pre-COVID levels, providing an attractive entry point for investors.
In summary, the consensus among these brokers suggests that Qantas shares have the potential to surpass $6.00 and even reach $7.30 or $8.25 in 2024. The optimistic outlook is driven by expectations of a strong recovery in demand for travel, coupled with Qantas' improved financial position and strategic advantages in the market.
