The Qantas share price is down 24% since its peak, is it a buy?

Is this a good time to invest in Qantas shares?

| More on:

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

The Qantas Airways Ltd (ASX: QAN) share price has gone through a hefty bit of turbulence, as the below chart shows. The airline has suffered a decline of 24% from its peak in August 2025.

The business has faced headwinds from a higher oil/fuel price amid the events happening in the Middle East.

But, I'm not afraid to invest when there is uncertainty.

I think it's important to take into account how the business performed in the recent result and keep in mind it's not certain the oil price will be impacted for the longer-term. If there is to be a negative hit to Qantas earnings, the share price may already reflect that.

So, I'm going to focus on the operational performance of Qantas and analyst views on the financials when the Qantas share price was trading at $9.67 (it's lower now – $9.24 at the time of writing).

Smiling woman looking through a plane window.

Image source: Getty Images

Solid numbers by the ASX travel share

In a note, UBS highlighted underlying profit before tax (PBT) was up 5% year-over-year and was 1% higher than UBS was expecting. While revenue was slightly lower than expected (but still up 6% year-over-year), this was more than offset by lower operating expenditure, depreciation and amortisation (D&A) and interest expenses.

Qantas' operating profit (EBIT) was below expectations, Qantas' international was roughly in line with expectations, and Jetstar and corporate costs were better than expected.

Pleasingly, the base dividend was lifted by 20% to $300 million (or 19.8 cents per share, fully franked), which was 12% higher than UBS was forecasting. Additionally, Qantas' board decided to announce a $150 million share buyback, though this is a 'non-recurring' part of capital returns.

Why the Qantas share price is attractive

UBS said that the market response after that FY26 half-year result, being a 9% decline, was an overreaction. It thought the drop happened because:

(1) incoming expectations of favourable earnings revisions which did not eventuate, mostly due to recent oil price moves; (2) undue attention placed on 'normal' earnings seasonality that would have implied consensus downgrades; (3) concerns about the performance of Qantas International, particularly ahead of Sunrise adding material new capacity from next year. However, we are less concerned, with our EPS forecasts and valuation hardly changed.

UBS' projection of Qantas' profit suggests the business could make $1.75 billion of net profit in FY26 and $1.9 billion in FY27. That implies the business is currently valued at 8x FY26's estimated earnings.

The broker has a price target of $11.60 on the airline at the time of writing, suggesting an appealing double-digit return over the next year. If the fuel price does stay higher for longer, the airline can pass on those costs onto customers.

Motley Fool contributor Tristan Harrison 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 passenger plane is on the tarmac with passenger shute attached with a view of the surrounding land and sunset in the background.
Travel Shares

Qantas shares sink 13% in a week: What happened, and how long will it last?

Here's the latest update.

Read more »

Smiling woman looking through a plane window.
Travel Shares

Should I buy Qantas shares after their 9% decline?

The airline delivered strong profits, yet the shares fell 9%. Here’s how I see it.

Read more »

A woman reaches her arms to the sky as a plane flies overhead at sunset.
Travel Shares

Brokers think these two travel shares could take off

Investors, pack your bags.

Read more »

Couple at an airport waiting for their flight.
Travel Shares

Qantas shares tumble 6% despite first-half earnings beat

The Flying Kangaroo has released its half-year results today.

Read more »

A woman reaches her arms to the sky as a plane flies overhead at sunset.
Travel Shares

After a solid profit result, brokers say Flight Centre shares are looking cheap

This stock could be poised to take off.

Read more »

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

Up 97% in 2 years, can Qantas shares keep the momentum going when the airline reports results on Thursday?

A leading investment analyst offers an earnings preview for Qantas shares.

Read more »

An airport ground staff worker holds two red beacons in either hand crossed above his head on a vast airport tarmac.
Travel Shares

Webjet Group shares plunge as Helloworld takeover plans fall through

It's no deal for the Webjet Group board.

Read more »

a man sitting in an aeroplane seat holds the top of his head as he looks at his airline ticket with an annoyed, angry expression on his face.
Travel Shares

Virgin Australia shares fly 10% higher: Time to buy, sell or hold?

The airline's share price has suffered multiple ups and downs over the past six months.

Read more »