The Qantas Airways Ltd (ASX: QAN) share price has outperformed the market in recent years.
Since this time in 2024, the airline has soared by around 85%.
After a strong run like this, the question for investors is whether there's still upside left, or whether the easy money has already been made.
Based on current broker expectations, I think the answer is yes, there could still be meaningful upside over the next 12 months.
Macquarie has an outperform recommendation and a $12.29 target price on the shares. That implies around 21% upside from current levels. On a $10,000 investment, that alone would lift the value to roughly $12,100.
But that's only part of the picture.
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Dividends could add another $500
In addition to share price upside, Macquarie expects Qantas to deliver a dividend yield of around 5% in FY26.
On a $10,000 investment, that equates to roughly $500 in dividend income over the next year. Combined with the potential share price appreciation, the total value of an investment could approach $12,600 in 12 months if things play out as expected.
That combination of capital growth and income is one of the reasons I still find the stock appealing at current prices.
Jetstar is doing the heavy lifting
A key part of the bullish case is the role Jetstar (JQ) continues to play within the group.
Macquarie points out that "JQ continues to be the growth driver, both domestically and internationally," helped by capacity redeployment and strong positioning in value-focused travel markets. That matters because Jetstar gives Qantas exposure to growth without relying entirely on premium travel demand.
Even where international load factors (LF) have softened, Macquarie notes that the impact has been manageable. For Qantas' international operations, "the deployment of the A380 has improved the yield mix, resulting in a likely neutral net outcome." In other words, weaker volumes are being offset by better aircraft utilisation and pricing.
Costs and fleet renewal
Another reason I'm comfortable with the outlook is cost control.
Macquarie acknowledges that "LF may have peaked and RASK is softening," but also argues that this is being "more than offset by softer oil prices, strong cost discipline, and the benefits of a newer fleet."
That's an important point. Airlines don't need perfect demand conditions to perform well if costs are moving in the right direction. A younger, more efficient fleet combined with disciplined execution can protect margins even when growth moderates.
Looking ahead, Macquarie expects FY26 earnings per share growth of 11%, which it describes as attractive in the context of the current valuation.
Long-term productivity upside is underappreciated
One of the more interesting longer-term drivers is Project Sunrise.
Macquarie says it is "excited about the significant productivity benefits expected on the London route," noting that the new service will require only two aircraft instead of three to operate daily flights. That kind of efficiency gain can have a meaningful impact on returns over time.
It's not something that will show up overnight, but it reinforces the idea that Qantas is still finding ways to improve productivity rather than relying solely on cyclical tailwinds.
Foolish takeaway
At $10.15, the Qantas share price is no longer cheap. But it doesn't need to be.
If Macquarie's $12.29 target is reached and the expected FY26 dividend is delivered, a $10,000 investment could realistically grow to around $12,600 over the next 12 months. That's a compelling outcome for a stock with a strong market position, improving cost structure, and clear earnings momentum.
Nothing is guaranteed, especially in aviation. But based on the current setup, I think Qantas still offers a reasonable risk-reward balance for investors.
