UBS believes there is an increasing likelihood that Qantas will pursue direct flights to New York and London. An increase in capital expenditure is expected as a result.
The broker reduces FY20 estimates for earnings per share by -6% although estimates for FY21 are unchanged because of a lower oil price forecast.
The broker retains a Buy rating and reduces the target to $7.25 from $7.30.
Sector: Transportation.
Target price is $7.25.Current Price is $6.42. Difference: $0.83 – (brackets indicate current price is over target). If QAN meets the UBS target it will return approximately 11% (excluding dividends, fees and charges – negative figures indicate an expected loss).
