Domestic capacity will increase to almost 70% of pre-pandemic levels by the end of the year. UBS suspects Qantas is taking share and the recent news around a vaccine now outweighs the risk of further domestic border closures.
Qantas has indicated it has liquidity of $3.6bn in net debt of $5.9bn. As a vaccine is expected within the next 12 months the broker considers the balance sheet risk is materially reduced.
Buy rating maintained. Target rises to $6.20 from $5.25.
Sector: Transportation.
Target price is $6.20.Current Price is $5.27. Difference: $0.93 – (brackets indicate current price is over target). If QAN meets the UBS target it will return approximately 15% (excluding dividends, fees and charges – negative figures indicate an expected loss).
