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Why Qantas Airways Limited shares nosedived today

One of the worst performers on the market on Friday was the Qantas Airways Limited (ASX: QAN) share price.

The shares of Australia’s flag carrier airline finished the day 5.5% lower at $5.96.

What happened?

This morning Qantas held its annual general meeting in Melbourne.

Although CEO Alan Joyce stated his belief that Qantas was on course for another successful year in the face of rising fuel costs, it appears that some investors weren’t convinced.

In its quarterly report released yesterday, the company advised that fuel costs were expected to rise by $170 million to approximately $3,210 million. The market may expect this to weigh heavily on its profitability.

Another potential catalyst for today’s decline was a broker note out of Ord Minnett. According to the note, its analysts have retained their sell rating and $4.55 price target.

The broker appears to believe that the first-quarter may be as good as it gets this year for the airline.

Ord Minnett’s price target implies potential downside of almost 24% from the last close price.

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Motley Fool contributor Motley Fool Staff has no position in any stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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