Why this fundie is tipping 120% upside for the Qantas share price

Could the Qantas share price reach $12?

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Key points

  • The Qantas share price has been tipped for a gain of nearly 120% in the future. That could see the airline's stock trading at around $12 
  • L1 Capital's Mark Landau is reportedly bullish on the stock in the long-term 
  • He likes Qantas' current level of demand, its fuel hedging position, and its valuation multiple 

The Qantas Airways Limited (ASX: QAN) share price is still trading around 15% lower than it was pre-COVID, but this expert thinks that could soon change.

L1 Capital co-founder, joint managing director, and chief investment officer, Mark Landau recently outlined why he believes stock in the iconic ‘flying kangaroo’ could be worth looking at.

As of Friday’s close, the Qantas share price is $5.60.

That’s 12% higher than it was at the start of 2022. And Landau is tipping the stock has more gains to come.

Let’s take a look at why he thinks the airline’s shares could soon boast a 120% gain.

Could the Qantas share price reach $12?

Landau reportedly thinks the Qantas share price could go sky high over the coming years.

At the time Landau gave his prediction, the Qantas share price was $5.50. That saw it trading on a valuation multiple of around 5.5 times earnings, reported Livewire.

“But in a normal world, if you assume Qantas trades at the same discount to market that it’s traded on over the 10 years – about a 40% discount to the ASX 200 Industrials,” Landau was quoted as saying.

The fundie thinks the Qantas share price could rise by nearly 120%, with a major surge to be had over the next year or two. That could see it trading at around $12 a piece.

“You’ve got really strong demand, strong pricing, and a billion-dollar cost out that management did in the middle of the crisis,” Landau said.

The last few weeks have been the busiest period for Australia’s airports since the onset of the pandemic.

Qantas CEO Alan Joyce recently noted that the airline had seen international travel rebound since Australia’s borders reopened. Meanwhile, QantasLink CEO John Gissing said the airline’s offshoot has seen a surge in demand for domestic travel.

The national airline is also protected from surging oil prices. Qantas has squirrelled away enough oil to dodge the energy commodity’s price rise for now.

Its oil exposure is 90% hedged until June, according to reporting by The Motley Fool Australia’s Bernd Struben.

While the airline will eventually be hit by higher oil prices, its competitors will likely be worse off, Landau said.

Motley Fool contributor Brooke Cooper 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 Scott Phillips.

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