Qantas Airways Ltd (ASX: QAN) shares are lifting off today.
Shares in the S&P/ASX 200 Index (ASX: XJO) airline stock closed yesterday trading for $10.29. During the Wednesday lunch hour, shares are changing hands for $10.54 apiece, up 2.4%.
For some context, the ASX 200 is up 0.3% at this same time.
Following a strong rebound commencing in late May, Qantas shares have now recovered almost all of the 23.5% losses suffered in the first month following the outbreak of the Iran war on 28 February.
Those losses were partly driven by concerns that the conflict could crimp international travel demand. Surging oil prices also saw investors reach for their sell buttons, with higher jet fuel costs expected to take a bite out of the airline's profits and upcoming dividends.
Looking ahead, MPC Markets' Mark Gardner believes the recent rebound in the ASX 200 airline makes now an opportune time to sell (courtesy of The Bull).
Here's why.
Image source: Getty Images
Time to sell Qantas shares?
"The airline giant is exposed to volatile jet fuel prices in response to the Middle East conflict," Gardner said.
He noted:
Although QAN hedged about 90% of its exposure to crude oil prices in the second half of 2026, it was exposed to movements in jet refining margins. Qantas announced in April that jet refining margins had increased from US$20 a barrel in February to a peak of around US$120 a barrel.
On 14 April, amid the surging oil prices that followed the closure of the vital Strait of Hormuz shipping lane, Qantas increased its second-half jet fuel cost guidance to between $3.1 billion and $3.3 billion. That's potentially $800 million more than the airline had reported six weeks earlier, shortly before the outbreak of hostilities.
Summarising his sell recommendation on Qantas shares, Gardner concluded, "The company announced capacity adjustments and fare increases to mitigate the impact of the Middle East conflict. Higher fares may impact demand. We would be inclined to sell into strength."
Consider this ASX 200 defence stock instead
While Gardner is bearish on the medium-term outlook for Qantas shares, he issued a buy recommendation for remote weapon systems developer Electro Optic Systems Holdings Ltd (ASX: EOS).
Up 2.% today at $7.71 a share, shares in the ASX 200 defence stock have surged 81.9% in 12 months. Though shares remain down 37.4% since notching a record closing high on 2 June.
According to Gardner, that pullback represents a buying opportunity today.
Gardner said:
This counter drone and laser weapons group had an order book of $846 million at June 30, 2026, an 84% increase since December 31, 2025. In May, it completed the acquisition of the MARSS Group, a provider of artificial intelligence enabled command and control systems for counter drone capability.
The company upgraded full year 2026 revenue guidance to between $280 million and $300 million, excluding MARRS.
The stock has fallen significantly between June 2 and July 30 to the point it has been materially over-sold, in our view. Investors can consider buying EOS on weakness.
