As global travel gradually makes a comeback, travel shares are front and centre with market pundits evaluating their next moves on the sector.
After a return to green territory in 2022, the Qantas share price has managed an 11% gain since trading resumed in January.
Today, Qantas Airways Ltd (ASX: QAN) shares lifted from the open and now trade at $5.56 apiece, up 2.21%.
In wider market moves, the S&P/ASX 200 Industrials Index (ASX: XNJ) is up 1.1% in morning trade on Wednesday.
Are Qantas shares set for takeoff?
Analysts at investment bank JP Morgan are overweight on Qantas shares and value the airline at $6.40 per share.
The broker is constructive on Qantas given current industry headwinds, noting "the airline industry is in the midst of its greatest-ever challenge".
In a note to clients, JP Morgan said:
Against this backdrop, we see QAN as being well positioned, given…it has taken material costs out of its business, approximately $1 billion p.a. of which are likely to be ongoing savings from FY23 [and] its high proportion of earnings from domestic and loyalty at ~70-75% of earnings.
JP Morgan also likes Qantas' "strong relative balance sheet positioning; and more favourable competitive position – both domestically and internationally".
With travel activity and momentum improving domestically, additional international destinations opening and Loyalty continuing to generate cash, we reiterate our overweight recommendation and price target of A$6.40.
Meanwhile, nine other brokers advocate buying Qantas shares at the moment, whereas three rate the company as a hold, according to Bloomberg data.
Just one broker, Credit Suisse, is urging its clients to sell Qantas shares at the minute.
From this list, the consensus price target is $6.32 apiece, suggesting there's more upside yet to be baked in if this group has Qantas valued correctly.
In the last 12 months, the Qantas share price has climbed 21% into the green on the back of solid gains in 2022.
