Qantas Airways Ltd (ASX: QAN) shares have surged more than 80% over the past year.
Over the past 5 years, the stock has risen a staggering 208%. For the year to date, Qantas shares have risen 23%.
Both long-term and more recent Qantas investors have been well rewarded for backing the airline.
Qantas is Australia's largest airline, boasting more than 60% market share of the domestic Australian market (across Qantas and Jetstar). It also operates international flights and has a loyalty program (Frequent Flyer), along with other ancillary revenues.
The company also has ambitious plans in the works. Through Project Sunrise, the airline is planning to launch ultra long haul flights from Australia's east coast to London and New York by the end of 2025.
Earlier this month, The Motley Fool's James Mickleboro reported that Qantas had been hit with a significant cyber attack that had impacted millions of customers. While the stock suffered a 2% decline that day, it has since recovered and hit an all-time high of $11.20 earlier today.
Can Qantas shares keep up their dominant performance? Or has the stock run too far?
Let's see what one expert had to say.
Macquarie raises its price target
In a 14 July research note, Macquarie Group Ltd (ASX: MQG) raised its price target on Qantas shares.
The broker increased its 12-month price target from $10.10 to $10.40.
However, given that shares are currently changing hands for $11.15, this suggests the stock will still decline from here over the next 12 months.
Accordingly, the broker reiterated its neutral rating and provided the following justification:
FY25 outlook is strong with LFs nearing record highs. FY26E EPS growth of 9% is attractive but captured by EV/EBITDA multiple at 10 yr. We remain cautious on International given capacity growth on Europe and US in FY26.
Macquarie highlighted several potential risks that could see Qantas' share price decline.
Firstly, high operating leverage to travel demand. This is closely linked to business and consumer confidence. Forward bookings on domestic and international flights take 6 weeks and 6 months, respectively.
The broker also noted challenges associated with navigating volatility in the jet-fuel market, which accounts for around 30% of the cost base.
Additionally, Macquarie said the 'state of competition' can have a material impact on profitability, particularly through competitive pricing and increased capacity.
What are other brokers saying?
Back in February, broker JP Morgan Chase & Co (NYSE: JPM) placed a price target of $9.39 on Qantas shares after reviewing its half-year results.
The broker hasn't changed its forecast since, suggesting it still believes the stock will decline from here.
Foolish Takeaway
Qantas shares hit a new all-time high today of $11.20. However, while the ASX 200 stock seems unstoppable, two brokers predict that shares will trade lower in 12 months' time. This suggests investors should put their money behind more attractively valued options today.
