Could the Qantas (ASX:QAN) share price soar to $6.50 by the end of 2021?

Are Qantas shares going to take off?

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The Qantas Airways Limited (ASX: QAN) share price has been a strong performer in 2021.

Since the start of the year, the airline operator’s shares are up 16%

This compares favourably to the S&P/ASX 200 Index (ASX: XJO), which has gained 10% over the same period.

Could the Qantas share price hit $6.50 by the end of the year?

According to a recent note out of one of Australia’s leading brokers, the Qantas share price could be about to take off.

The note out of Ord Minnett reveals that its analysts have retained their buy rating and lifted their price target on the company’s shares to $6.50.

Based on the current Qantas share price of $5.69, this implies potential upside of 14% for investors.

Unsurprisingly, the broker feels it is a little too soon to start thinking of dividends. Though, it does see potential for one in FY 2023 and has pencilled in a 28 cents per share dividend.

Overall, based on the above, Ord Minnett appears to believe it is possible for Qantas’ shares to be trading around the $6.50 level by the end of the year.

What did the broker say?

Ord Minnett is positive on the Qantas share price due to its belief that there is significant pent-up demand for domestic air travel.

The broker also expects rational pricing from domestic carriers as borders between states reopen following the easing of COVID-related restrictions. And with Virgin Australia downsizing, its analysts expect Qantas to win market share and sees opportunities for it to achieve a 70% share in the future.

Another reason the broker is positive is Qantas’ restructuring plans. It notes that this is tracking ahead of schedule, which helps support a positive earnings and margin outlook in the near term.

All in all, the Qantas share price may be beating the market this year, but this broker doesn’t believe it is too late to invest.

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. 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.

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