The Qantas Airways Limited (ASX: QAN) share price has been a strong performer for investors. In the past year, it has risen by 43%. This compares to a gain of around 16% for the S&P/ASX 200 Index (ASX: XJO).
Over the last 12 months, shareholders in many companies have enjoyed some excellent returns, and Qantas has done a good job of growing investor wealth.
A $10,000 investment in the ASX travel share a year ago would have delivered significant paper gains already.
As mentioned, the Qantas share price has risen 43% over the last 12 months. This would see our $10,000 investment grow into $14,300, adding $4,300 to the investor's wealth.
What has driven the returns? The Qantas share price has flown since the reporting season. Let's recap.
FY24 earnings recap
In the 12 months to 30 June 2024, Qantas reported its underlying profit before tax decreased 16% to $2.08 billion, and the statutory profit after tax dropped 28% to $1.25 billion.
However, there were plenty of positives.
The company said Qantas and Jetstar's on-time performance increased by 10 percentage points and 8.8 percentage points, respectively. It also announced shareholder distributions of up to $400 million via an on-market share buyback.
It also said that looking forward, bookings and travel demand remain stable, with an intention to travel and revenue intake trends remaining positive across all flying brands.
In FY25, group domestic unit revenue is expected by Qantas to increase by between 2% to 4% in the first half of FY25 compared to the previous year. However, group international unit revenue is expected to fall by between 7% to 10% over the same time period as market capacity continues to restore, though the rate of decline is expected to slow in FY25.
Qantas is targeting transformation benefits of approximately $400 million in FY25 to offset inflation.
Is the Qantas share price still a buy?
The broker UBS thinks the ASX travel share is a buy, with a price target of $7.95, which implies it could rise another 7% from today's level.
UBS noted a few things about Qantas, including the airline's resilient revenue, a track record of tapering capacity growth and even withdrawing it when demand doesn't support it, and the strength of its operating cash flow.
Based on the estimates from UBS, with an expectation of earnings per share (EPS) of 94 cents in FY25, the Qantas share price is valued at 8x FY25's estimated earnings.
