The Qantas Airways Limited (ASX: QAN) share price is slightly higher this morning, up 0.54% and changing hands at $5.58 in early trade.
Zooming out, Qantas shares have rallied 2.76% in the past month as the broader travel industry gets ready for the impending restart of domestic and international travel penned in for later this year.
What's been fuelling the Qantas share price lately?
Qantas shares popped back in August after the company revealed it is planning to restart international flights from December.
Around that time, some destinations including Singapore, the US, UK, Japan and Canada will be reachable by air for the first time since COVID-19 forced the closure of the Australian international border.
The airline carrier is wagering that Australia will reach its 80% double-vaccination target set by the National Cabinet earlier this year.
According to the Department of Health, 64.4% of all eligible people have now been immunised against the SARS-CoV-2 virus.
Investors appear bullish on Qantas shares in a "reopening play" that is gaining steam as vaccination numbers creep up.
As this momentum builds, one leading broker has weighed in and presented their outlook for the Qantas share price.
Can Qantas continue its recovery?
Investment banking giant Citibank certainly believes so and likes the timing of the company's capital expenditure cycle and the restarting of long-haul international flight routes.
The broker reckons that Qantas' capital expenditure cycle will eventually peak in FY24, judging by the timing of incoming plane deliveries and the airline's intention to start non-stop flights to the US in 2022.
Curiously, Citi also believes that Qantas may benefit from more favourable pricing from aircraft manufacturers Boeing (NYSE: BE) who are on the quest to regain both market share and credibility after a few horror years.
City says Boeing may tighten its pricing to become more competitive, thereby helping Qantas' operating profit margins.
Not only that, the bank likes Qantas' financial health, and reckons it will only need to make periodic payments to service liabilities on its incoming aircraft, hence avoiding the need to raise more capital and dilute investors' shareholdings.
Given this view, Citi is bullish on Qantas shares and maintains its buy rating and a $5.93 price target. This implies an upside potential of 7.4% on the current share price.
Fellow broker JP Morgan is also bullish on Qantas shares and recently increased its price target by 10 cents to $5.80.
The Qantas share price has managed to claw back some of its 2020 losses and is 13.75% in the green since January 1.
The Qantas share price is up 32.6% over the past 12 months.
