Even better than Virgin Australia, mind.
According to an equities note from Commonwealth Bank analysts, Qantas is finally a decent investment again thanks to improving capacity and recent success compared to previous months.
Image: Scott Barbour/Stringer
According to CommBank, the decay of Qantas has finally come to a halt:
We feel Qantas’ earnings have bottomed and its balance sheet has improved. The Emirates Alliance is a strong positive and we expect international earnings to recover strongly. We see considerable valuation upside with QAN trading at a 22% discount to our DCF and a 30% discount to NTA.
Indeed, the ACCC today signed off on the Qantas/Emirates deal, albiet with provisions, and the decay in the company’s share price is currently being reversed, with the value rising from $0.97 per share last July to $1.75 and climbing at the time of publication.
In contrast, CBA has declared that Qantas is currently a better investment than business carrier rival, Virgin Australia, following disappointing earnings numbers:
Virgin Australia is also exposed to yield recovery. However, VAH is already trading near NTA and consensus appears to factor in yield recovery. We were disappointed by the quality of the interim result. It will take an unusually good second half to meet guidance.
Read the full note here.
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