UBS: Qantas Is Heading To A $1 Billion Profit

Photo: Getty Images

Qantas Airways is heading to a pretax profit of $1 billion this year due in part to lower fuel prices, according to UBS analyst Simon Mitchell.

Fairfax Media reports that the airline could hit a record $1.7 billion in the 2016 financial year.

“We see FY16 as peak profit, aided by transformation gains and a lag in passing on fuel savings,” Mitchell said.

Mitchell has raised his 12-month Qantas price target on the stock to $4 from $2.80.

Qantas shares are trading today at $2.44, up 2.73%.

The airline is in the middle of a $2 billion restructure and has previously told the market it expects to be back in profit this financial year.

Qantas plans to keep most of the lower fuel cost savings from plunging global oil prices.

NOW WATCH: Money & Markets videos

Business Insider Emails & Alerts

Site highlights each day to your inbox.

Follow Business Insider Australia on Facebook, Twitter, LinkedIn, and Instagram.