Qantas Airways Ltd (ASX: QAN) shares are ascending again on Tuesday.
Earlier today, the airline operator's shares climbed to a new record high of $11.06.
This latest gain means that the Flying Kangaroo is now up 130% since October 2023.
Is it too late to invest? Let's see if analysts think that Qantas is a buy, hold, or sell.
Should you buy Qantas shares?
Most brokers currently rate the airline as a hold following its incredible run over the past 18 months.
For example, the team at Morgans has a hold rating and $9.40 price target on its shares. This implies potential downside of 14% for investors over the next 12 months.
Elsewhere, Citi, Macquarie, and UBS have neutral ratings on Qantas' shares with price targets ranging from $9.30 to $9.65. This suggests that downside of approximately 12% to 15% is possible from current levels.
Are there any bulls?
The good news is that not everyone thinks that Qantas shares are beyond fair value now.
One broker that is bullish is Morgan Stanley. It has an overweight rating and $11.50 price target on its shares. This implies potential upside of 5% between now and this time next year.
Finally, the team at Goldman Sachs is arguably the most positive broker out there. It recently put a buy rating and $11.80 price target on its shares. This suggests that upside of 8% is on the cards for buyers of its shares today.
In addition, the broker is forecasting a 43 cents per share dividend in FY 2025. This represents a 3.9% dividend yield based on its current share price.
Commenting on the airline, the broker said:
QAN's earnings capacity has sustainably improved relative to pre-COVID, which provides a solid foundation for QAN's next stage of growth. Specifically, 1H25a PBT was 79% ahead of 1H19a. Capacity was largely restored with RASK up broadly in-line with inflation (albeit with a substantially higher fuel price). From here, unit revenues appear set to inflect higher in the 2H (RASK guide was the key positive surprise within 2H25e guidance). We forecast 20% PBT growth in 2H25e and 15% for FY25e (up from our pre-result forecasts of 7% and 10% respectively).
It also sees scope for surplus capital to be returned to shareholders. Goldman adds:
In 1H25, QAN took delivery of 11 aircraft. Within this Jetstar took delivery of 8 new aircraft – with the renewal upside (& robust demand) evident in segment margins. As the renewal program gains momentum across the group/, we see upside from yield mix, load factor, capacity and cost efficiencies, driving the next leg of growth. There is clearly capex attached to renewal (GSe A$12.5bn of total capex across FY25-27 vs A$12bn prior), of which A$6.5bn is on new aircraft. However, our modeling of the operational benefits (incorporated with this note) provides us with confidence that QAN should continue to track the bottom of its target leverage range and therefore generate surplus capital to return to shareholders.
Overall, this could be a sign that the Qantas share price has still not reached its peak.
