It was one step forward and two steps back for the Qantas Group Ltd (ASX: QAN) share price in April. Shares in the airline finished the month 3% lower, with the market seemingly unphased by its positive business update on 15 April.
The Qantas share price is at a standstill as domestic capacity is expected to surpass pre-COVID levels while vaccine delays continue to delay the topic of international travel.
Qantas shares have seemingly gone nowhere since a 10% jump to $5.20 on 10 November 2020. This was driven by the initial trial results for the Pfizer vaccine which showed an efficacy rate of more than 90%.
At the time of writing, the Qantas share price is down 0.3%, trading at $4.93. Let's check in with the airline.
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Domestic travel is good but …
Qantas' business update announced that fourth-quarter capacity was expected to reach more than 90% of pre-COVID capacity by 4Q21 and more than 100% in FY22.
Despite the positive news for its domestic travel, Morgan Stanley notes that the impact on profit is relatively small.
International travel is key
Qantas CEO Alan Joyce has said in regards to international travel that:
The vaccination program is absolutely key to restarting international flights in and out of Australia. While there have clearly been some speedbumps with the vaccine rollout, we are still planning for international flights to resume in late October.
Despite the positive commentary, the resumption of international travel is entirely out of Qantas' control.
Brokers such as Ord Minnett reduced their international capacity assumptions back in mid-April to reflect the revised timeline of vaccinations.
Whereas Macquarie said it would continue to monitor vaccine roll-outs in key destinations such as the United States and Singapore that formed a significant proportion of the company's available seat kilometres.
Brokers are bullish across the board
It isn't often that brokers share the same view on a stock. But across Ord Minnett, Morgan Stanley, Macquarie, Citi and UBS, all five brokers maintain a buy or buy-equivalent rating for the Qantas share price with an average target price of $6.13.
This would represent an upside of approximately ~23% compared to today's price of $4.93.
