The Qantas Airways Limited (ASX: QAN) share price is under pressure on Monday.
In afternoon trade, the airline operator's shares are down 1.5% to $4.64.
Why is the Qantas share price under pressure?
The weakness in the Qantas share price on Monday appears to have been driven by concerns over Australia's COVID-19 outbreak.
With New South Wales continuing to report high levels of new infections and Victoria extending its lockdown, investors appear to believe the domestic travel market recovery could be further delayed.
Fellow travel shares Flight Centre Travel Group Ltd (ASX: FLT) and Webjet Limited (ASX: WEB) are also trading notably lower today.
Is this a buying opportunity?
According to a note out of Citi this morning, its analysts see a lot of value in the Qantas share price at the current level.
This morning the broker retained its buy rating, albeit with a trimmed price target of $5.61.
Based on the current Qantas share price, this implies potential upside of almost 21% over the next 12 months.
What did the broker say?
The broker has been looking into border restrictions and lockdowns. While these will weigh on the company's performance, Citi believes Qantas will be okay financially if it is just New South Wales that is locked down.
Citi commented: "Given heightened lockdown fears, we attempt to look through the noise and quantify the potential impact of border restrictions. Overall we estimate the relevant number we'll keep our eye on is ~60% for capacity. At this level we believe EBITDA loses will be manageable, and only minor strain placed on the balance sheet. Theoretically we estimate capacity could remain at this level with just New South Wales locked down. However, the same can't be said if we go into sustained lockdowns in other major states at the same time."
In light of this, it is keeping its buy rating on the Qantas share price for the time being. Though, it may reassess its recommendation if things escalate.
