Qantas Airways Ltd (ASX: QAN) shares have had a tough run on the market recently.
The shares are trading around $9.01 today, well below their 52-week high of $11.39.
I think that weakness has made the valuation more interesting, particularly for investors prepared to look beyond the next few months.
Here's why I would invest $10,000 in Qantas shares today.
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The underlying business still looks strong
Qantas remains in a powerful position in Australian aviation.
Its domestic network gives the group strong exposure to business and leisure travel, while Jetstar provides a lower-cost option for customers who are more sensitive to price.
I also like the contribution from Qantas Loyalty. Its Frequent Flyer program gives the company another way to earn from its customer base outside the airline itself, while also encouraging passengers to remain within the wider Qantas ecosystem.
Then there is the fleet renewal program and Project Sunrise, which should gradually modernise the airline and expand what Qantas can offer on long-haul routes.
None of those opportunities depends on the share price recovering quickly. They are reasons I think the business itself can keep improving over the coming years.
Near-term pressure would not put me off
One issue I would watch closely is the oil price. Fuel is a major expense for airlines, so a sustained rise in oil prices could put pressure on Qantas' margins in the near term.
That could make earnings more volatile than investors would like and is one risk I would keep in mind at the current price.
I would not ignore that risk. At the same time, I still think Qantas is well placed to deliver solid earnings over the next few years. The company has significant scale, a strong domestic position, multiple brands, and several sources of revenue beyond simply selling airline seats.
For me, that gives the business more resilience than the share price currently seems to imply.
The valuation looks attractive
I think Qantas shares are looking attractive at current prices.
According to CommSec, consensus forecasts point to earnings per share of $1.04 in FY27, rising to $1.30 in FY28 and $1.50 in FY29.
At $9.01, Qantas is trading on a PE ratio of roughly 8.7 times forecast FY27 earnings.
If the FY29 estimate is achieved, that multiple falls to around six times earnings.
I think that looks cheap enough to compensate for some of the risks that come with owning an airline.
Investors may also receive a growing stream of dividends while waiting.
Consensus forecasts suggest dividends per share of 39.6 cents in FY27, 43.1 cents in FY28, and 49.6 cents in FY29.
At today's share price, those estimates represent forward dividend yields of roughly 4.4%, 4.8%, and 5.5%, respectively.
Foolish takeaway
I would be comfortable investing $10,000 into Qantas shares at current levels.
The airline industry will always bring volatility, but Qantas has several strong businesses underneath the headline brand and a clear path to higher earnings if current expectations are met.
At around $9.01, I think the shares offer enough value to make that risk worthwhile.
