After a horror 2023, what's next for Qantas shares?

Can Qantas have a better year in 2024 than its horror show this year?

| More on:
Man in suit looks through binoculars in front of a control tower at an airport.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

It's safe to say that the Qantas Airways Limited (ASX: QAN) share price has had a horrible year. Things were going so well for the national carrier until about halfway through the year. Qantas shares were riding high and looked set to break the $7 mark for the first time since 2019.

Between 1 January and 1 June, the airline stock was up an impressive 14.3%.

But then things started to go off the rails.

CEO Alan Joyce departed the airline prematurely following a class action lawsuit related to cancelled flights during the COVID pandemic, as well as legal action brought by the Australian Competition and Consumer Commission (ACCC) for allegedly selling tickets for cancelled flights.

Then there was the High Court judgement that found Qantas had illegally sacked almost 1,700 employees.

By mid-October, Qantas shares had fallen more than 30% to a new 52-week low of $4.67.

As it stands, those shares have recovered somewhat and closed at $5.40 yesterday.

But after this year's drama, what could 2024 possibly hold in store for the embattled airline?

Will 2024 be kinder to Qantas shares?

Well, it's difficult to make share price predictions at the best of times. But this one is especially tricky, given the still-unknown impacts of the brand damage the airline has suffered this year.

Most Australians have been disappointed, to say the least, in Qantas' recent behaviour, as its management has acknowledged. However, the company still maintains a strong position in the market, and we've yet to determine whether its reputational hit will translate into a financial one.

One factor to watch will be fuel prices. One of Qantas' largest costs is jet fuel. Earlier this year, oil prices were trading high by historic levels. But over the past couple of months, oil has conspicuously fallen in price. This should give the company a major boost as we head into the travel-heavy holiday period.

But let's check out what an expert reckons. As my Fool colleague covered earlier this week, ASX broker Morgans is bullish on the Qantas share price heading into 2024. It has recently given the airline an add rating alongside a $7.30 share price target.

That would be a massive recovery from where the shares are today if accurate.

Here's some of what Morgans had to say about its optimism:

QAN is trading at a material discount compared to pre-COVID multiples, despite having structurally higher earnings, a much stronger balance sheet, a better domestic market position, a higher returning International business and more diversification (stronger Loyalty/Freight earnings).

The strong pent-up demand to travel post-COVID should result in a healthy demand environment for some time, underpinning further earnings growth over FY24/25.

So no doubt shareholders will appreciate that outlook. But let's wait and see what happens.

Motley Fool contributor Sebastian Bowen 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.

More on Travel Shares

A father helps his son look through binoculars during a family holiday or day out in the city.
Travel Shares

What's happened to ASX travel shares since COVID ended?

We review share price performances since 21 February 2022 when our international border reopened.

Read more »

Bored woman waiting for her flight at the airport.
Travel Shares

Why is the Flight Centre share price falling today?

What's going on with this travel agent's shares?

Read more »

Man sitting in a plane seat works on his laptop.
Travel Shares

A 'once in a lifetime' opportunity for Qantas shares?

Can this stock fly higher?

Read more »

Two elderly men laugh together as they take a selfie with a mobile phone with a city scape in the background.
Travel Shares

Act fast if you want to receive the next Flight Centre dividend

It won't be long until this travel agent pays its next dividend.

Read more »

Man sitting in a plane looking through a window and working on a laptop.
Travel Shares

Why is the Webjet share price racing to a 52-week high today?

Webjet has been busy talking up its WebBeds business this morning.

Read more »

A businessman points a finger in accusation, indicating a share price or ASX company in trouble
Travel Shares

Qantas shares hit turbulence amid $250,000 fine for 'shameful' conduct

ASX 200 investors are bidding down the Qantas share price on Wednesday.

Read more »

A woman ponders a question as she puts money into a piggy bank with a model plane and suitcase nearby.
Travel Shares

Flight Centre shares plunge 7% despite return of the interim dividend

ASX 200 investors are sending the Flight Centre share price spiralling lower on Wednesday.

Read more »

Happy couple looking at a phone and waiting for their flight at an airport.
Earnings Results

Flight Centre share price on watch amid 565% half-year profit surge

Flight Centre shares could see some sizeable moves today after the ASX 200 travel stock reported on its half-year results.

Read more »