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Qantas Airways Limited (ASX:QAN) has seen its shares soar by 16% since the beginning of 2024, significantly outperforming the broader market's returns over the same period. This impressive growth reflects strong investor confidence ahead of the airline's FY 2024 results, which are set to be announced next Thursday, August 29.
What to Expect from Qantas’ FY24 Results?
As anticipation builds, analysts are closely watching Qantas' financial performance. According to a recent note from Goldman Sachs, the airline is projected to report substantial revenue growth. Goldman Sachs forecasts FY 2024 revenue to reach AU$22,131.1 million, marking an 11.7% increase from the previous year. This growth highlights Qantas' continued strength in driving top-line performance amid a recovering travel sector.
However, the outlook on earnings presents a more nuanced picture. Despite the revenue boost, Qantas is expected to face increased operational costs. Goldman Sachs predicts a 17.7% rise in the cost of goods sold, reaching AU$18,094.7 million. This surge in costs is anticipated to impact profitability negatively, resulting in lower earnings compared to FY 2023 levels.
Specifically, the broker forecasts that Qantas will report an EBITDA of AU$4,036.4 million, reflecting a 9.2% decline year-over-year. The pre-tax profit is expected to be AU$2,001.5 million, down 18.8%, with net profit before one-offs also projected to decrease by 18.8% to AU$1,412.1 million. Diluted earnings per share (EPS) are estimated to be 85 cents.
Goldman Sachs does not anticipate any dividend payments for FY 2024. However, the broker is optimistic about the return of dividends in FY 2025, forecasting a payout of 30 cents per share for that year, with a similar amount expected for FY 2026.
The sharp rise in Qantas’ share price this year reflects investor expectations for a strong recovery and future growth, despite the short-term pressures on profitability. As the airline prepares to release its full-year results, market participants will be keenly analyzing the detailed figures and any forward guidance provided by management.
