The Qantas Airways Limited (ASX: QAN) share price was on form on Tuesday and charged higher.
The airline operator’s shares ascended over 3% to close the day at $5.26.
Why did the Qantas share price take off?
Investors were buying Qantas and other travel shares on Tuesday following the announcement of an Australia-NZ travel bubble.
This travel bubble will allow travellers from either side of the Tasman to visit without a 14-day COVID-19 quarantine period. It is due to open in less than two weeks on 18 April.
Is it too late to invest?
According to a note out of Goldman Sachs, it isn’t too late to invest.
This morning the broker reiterated its buy rating and $6.38 price target on the airline operator’s shares.
Based on the current Qantas share price, this price target implies potential upside of 21% over the next 12 months.
What did Goldman say?
Goldman Sachs was pleased with the news, noting that this would be a big boost to its international business. Particularly given how New Zealand accounted for ~13% of international passengers and ~5% of total passengers pre-COVID.
Its analysts said: “The announcement would add international volumes which has remained minimal given international border restrictions. Pre-Covid (CY19), New Zealand accounted for c. 13% of international pax (c. 5% of total pax) for Qantas group. It is difficult to forecast the recovery volume, but we highlight that with additional routes and capacity, and while other international destinations remain closed, it could present upside to pre-Covid levels.”
In light of this, the broker continues to believe that Qantas is a great COVID recovery investment option for investors.
“We reiterate our Buy rating on QAN.AX. QAN represents a strong recovery investment, if the Australian COVID-19 vaccination program has the effect of reducing community transmission of the virus and limits the need for domestic border closures,” Goldman concluded.
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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.