The Qantas Airways Limited (ASX: QAN) share price was amongst the most battered during the initial COVID-19 fuelled panic selling.
Not that many stocks escaped the early carnage. But with international and Aussie state borders slamming closed in early 2020, the flying kangaroo found most of its fleet suddenly grounded.
As investors panicked, the Qantas share price crashed 63.8% from 21 February through to 20 March 2020.
From there it's been a turbulent flight higher. Though higher it has gone.
After gaining 11.4% in last week's trading, Qantas shares are up 146.6% from that low as of Friday's close at $5.80 per share. The stock is now only down 11% from the $6.51 it was trading at before the pandemic panic selling commenced in February 2020.
Which begs the questions, has the Qantas share price finally left COVID in its contrail? And what can investors expect from the airline's share performance next
Can the Qantas share price keep flying higher?
The Qantas share price finished 8.7% higher last Thursday following a much stronger than expected market update.
Among the highlights, the company forecast underlying profit before tax for the first half of the 2023 financial year to fall between $1.2 billion and $1.3 billion.
Net debt also came down faster than expectations, with net debt forecast to fall to a range of $3.2 billion to $3.4 billion by the close of 2022. That's well below the low end of Qantas' net debt target range of $3.9 billion.
And both domestic and international capacity is climbing fast.
The strong results saw Barrenjoey increase its target for the Qantas share price from $6.60 to $7.40.
According to the broker (courtesy of The Australian Financial Review):
The Qantas market cap increased less than the improvement in the net debt position ($1bn). This, along with feedback from our investor conversations, suggests that the market remains concerned about the impact of a slowdown in consumer spending in 2H23.
We have capacity at 80% of pre-COVID levels in FY23 while demand is closer to 100%. Time will tell but, in our view, this should give Qantas some leverage to absorb a potential slowdown and given the lead time coming into a slowdown, the company is better placed to deal with this slowdown than in prior periods.
If Barrenjoey has it right, the Qantas share price could be up for a further 27.6% upside from Friday's close.
