Learn To Invest
Stocks Special Reports LICs Credit Funds ETFs Tools SMSFs
Video Archive Article Archive
News Stocks Special Reports Funds ETFs Features SMSFs Learn


Qantas shares fall on broker warning

Petrina Berry  |  28 Aug 2017Text size  Decrease  Increase  |  
Email to Friend

Page 1 of 1

BRISBANE - [AAP] Qantas (ASX: QAN) shares have fallen after investment bank JP Morgan warned that the airline faces persistent weak domestic air travel and challenging international conditions.

The carrier's shares were down 6.48 per cent, or 38 cents, at $5.64 at 1400 AEST, after having rallied to $6.02 on Friday--their highest level in almost 10 years--following a strong full-year result.

But on Monday, Qantas stocks began to fall after a JP Morgan report cautioned that the share price was too high.

"To justify the current share price ($6.02), we estimate further domestic fare increases in the order of 10 per cent (holding into perpetuity) are needed," the report by analysts Guy Bunce and Peiting Liang said.

They said that since July 2016, Qantas had outperformed the broader market significantly and investors should capitalise on the gains.

"Given the persistent headwinds from a weak domestic air travel market and challenging international conditions, we recommend investors take profit."

Qantas on Monday announced a major reshuffle of its senior executives in its low-cost carrier Jetstar and in its international division.

Email to Friend
Market News and Views Sign up today and receive our free Morning Note e-newsletter, daily in your inbox.

Jetstar CEO Jayne Hrdlicka will become CEO of Qantas' loyalty and digital ventures division, while current international and freight boss Gareth Evans will take over at Jetstar, in changes effective from November.

Freight, catering and airports division manager Alison Webster will become CEO of international, while freight will come under the management of domestic business CEO Andrew David.

Qantas delivered its second highest underlying annual profit in its 97-year history on Friday of $1.4 billion and announced a $373 million buyback to increase shareholder returns.

The results came a year after the carrier delivered a record $1.5 billion underlying profit and marked the completion of the airline's $2 billion turnaround that began in 2014 and included 5,000 job cuts, major fleet changes and new routes.


AAP logo image

© [2017] Australian Associated Press Pty Limited (AAP) or its Licensors. This is the Morningstar service with content provided by AAP where indicated. AAP reserves all rights, including copyright, in services provided by it. The information in the service is for personal use only, does not constitute financial product advice (whether general or personal) and may not be re-written, copied, re-sold or re-distributed, framed, linked or otherwise used whether for compensation of any kind or not, without the prior written permission of AAP. You should seek advice from a professional financial adviser before making decision to acquire or dispose of a financial product.

This service is published for general information purposes only without assuming a duty of care. AAP is not in the business of providing financial product advice (whether personal or general advice), and gives no warranty, guarantee or other representation about the accuracy of the information or images contained in this service. AAP is not liable for errors, omissions in, delays or interruptions to or cessation of the services through negligence or otherwise. The globe symbol and "AAP" are registered trademarks.

Email To Friend