Qantas Airways Limited (ASX: QAN) shares are lifting off again on Thursday. In afternoon trade, the airline operator's shares are up 2% to $6.60.
This means the Qantas share price is now up 23% over the last 12 months, as you can see below.
It appears that investors are betting on a strong half year update from the Flying Kangaroo on 23 February.
Ahead of the release, let's take a look at what the market is expecting from Qantas.
What is the market expecting from Qantas' half year results?
According to a note out of Goldman Sachs, its analysts have named Qantas as a positive surprise candidate during earnings season.
This is because of a string of updates from international peers since we've last heard from Qantas that appear supportive of a strong finish to the half. Goldman commented:
US airlines' 4Q results also reflected strength in pricing in the current environment, with American Airlines, Delta Airlines and United Airlines unit revenue averaging +19% vs. pre-covid level in the quarter.
Qantas has guided to underlying profit before tax of $1.35 billion to $1.45 billion for the half and Goldman appears to see this as being comfortably achieved.
Will there be a share buyback?
In light of this and its strong balance sheet, the broker sees scope for further capital management.
It expects a $400 million share buyback to be undertaken during the second half of FY 2023. This could be announced with its half year results.
Incidentally, the team at Morgans agrees with this view. It recently commented:
QAN's balance sheet strength positions it extremely well for its upcoming EBIT-accretive fleet reinvestment and further capital management initiatives (forecasting a A$400m on-market share buyback to be announced at 1H23 result).
Finally, while Morgans isn't expecting a dividend in FY 2023, Goldman is forecasting a 10 cents per share dividend. This could mean a 5 cents per share interim dividend is declared this month if Goldman is on the money with its forecast.
