ASX:QAN

Stock Analysis Report

Executive Summary

Qantas Airways Limited provides passenger and freight air transportation services in Australia and internationally.


Snowflake Analysis

Undervalued with moderate growth potential.


Similar Companies

Share Price & News

How has Qantas Airways's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: QAN's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

-9.2%

QAN

-11.5%

AU Airlines

-6.2%

AU Market


1 Year Return

-0.3%

QAN

-14.3%

AU Airlines

7.9%

AU Market

Return vs Industry: QAN exceeded the Australian Airlines industry which returned -2.7% over the past year.

Return vs Market: QAN underperformed the Australian Market which returned 10.9% over the past year.


Shareholder returns

QANIndustryMarket
7 Day-9.2%-11.5%-6.2%
30 Day-14.8%-10.8%-5.9%
90 Day-22.1%-14.0%-2.7%
1 Year4.0%-0.3%-12.3%-14.3%12.6%7.9%
3 Year68.9%52.5%-4.5%-9.9%31.3%13.8%
5 Year124.9%87.1%4.1%-5.2%42.6%10.6%

Price Volatility Vs. Market

How volatile is Qantas Airways's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Qantas Airways undervalued compared to its fair value and its price relative to the market?

45.8%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: QAN (A$5.72) is trading below our estimate of fair value (A$10.55)

Significantly Below Fair Value: QAN is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: QAN is good value based on its PE Ratio (10.3x) compared to the Airlines industry average (10.5x).

PE vs Market: QAN is good value based on its PE Ratio (10.3x) compared to the Australian market (18.2x).


Price to Earnings Growth Ratio

PEG Ratio: QAN is good value based on its PEG Ratio (0.7x)


Price to Book Ratio

PB vs Industry: QAN is overvalued based on its PB Ratio (3.2x) compared to the XO Airlines industry average (1.7x).


Next Steps

Future Growth

How is Qantas Airways forecast to perform in the next 1 to 3 years based on estimates from 10 analysts?

14.9%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: QAN's forecast earnings growth (14.9% per year) is above the savings rate (1.1%).

Earnings vs Market: QAN's earnings (14.9% per year) are forecast to grow faster than the Australian market (9.5% per year).

High Growth Earnings: QAN's earnings are forecast to grow, but not significantly.

Revenue vs Market: QAN's revenue (3.1% per year) is forecast to grow slower than the Australian market (4.1% per year).

High Growth Revenue: QAN's revenue (3.1% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: QAN's Return on Equity is forecast to be very high in 3 years time (55.2%).


Next Steps

Past Performance

How has Qantas Airways performed over the past 5 years?

26.9%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: QAN has high quality earnings.

Growing Profit Margin: QAN's current net profit margins (4.8%) are higher than last year (4.7%).


Past Earnings Growth Analysis

Earnings Trend: QAN has become profitable over the past 5 years, growing earnings by 26.9% per year.

Accelerating Growth: QAN's earnings growth over the past year (6.3%) is below its 5-year average (26.9% per year).

Earnings vs Industry: QAN earnings growth over the past year (6.3%) underperformed the Airlines industry 6.3%.


Return on Equity

High ROE: Whilst QAN's Return on Equity (31.91%) is high, this metric is skewed due to their high level of debt.


Next Steps

Financial Health

How is Qantas Airways's financial position?


Financial Position Analysis

Short Term Liabilities: QAN's short term assets (A$3.6B) do not cover its short term liabilities (A$8.7B).

Long Term Liabilities: QAN's short term assets (A$3.6B) do not cover its long term liabilities (A$8.9B).


Debt to Equity History and Analysis

Debt Level: QAN's debt to equity ratio (196.9%) is considered high.

Reducing Debt: QAN's debt to equity ratio has increased from 179.8% to 196.9% over the past 5 years.

Debt Coverage: QAN's debt is well covered by operating cash flow (52.9%).

Interest Coverage: QAN's interest payments on its debt are well covered by EBIT (8.8x coverage).


Balance Sheet

Inventory Level: QAN has a high level of physical assets or inventory.

Debt Coverage by Assets: QAN's debt is not covered by short term assets (assets are 0.7x debt).


Next Steps

Dividend

What is Qantas Airways's current dividend yield, its reliability and sustainability?

4.72%

Current Dividend Yield


Upcoming Dividend Payment

TodayFeb 27 2020Ex Dividend DateMar 02 2020Dividend Pay DateApr 09 202038 days from Ex DividendBuy in the next 4 days to receive upcoming dividend

Dividend Yield vs Market

Notable Dividend: QAN's dividend (4.72%) is higher than the bottom 25% of dividend payers in the Australian market (2.44%).

High Dividend: QAN's dividend (4.72%) is low compared to the top 25% of dividend payers in the Australian market (5.53%).


Stability and Growth of Payments

Stable Dividend: Whilst dividend payments have been stable, QAN has been paying a dividend for less than 10 years.

Growing Dividend: QAN's dividend payments have increased, but the company has only paid a dividend for 4 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonably low payout ratio (47.7%), QAN's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: QAN's dividends in 3 years are forecast to be well covered by earnings (40.9% payout ratio).


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

3.7yrs

Average management tenure


CEO

Alan Joyce (53yo)

11.3yrs

Tenure

AU$6,565,000

Compensation

Mr. Alan Joseph Joyce, AC, BApplSc(Phy)(Math)(Hons), MSc(MgtSc), MA, FRAeS, FTSE has been the Chief Executive Officer and President of Qantas Group at Qantas Freight Enterprises Ltd. since November 2008 an ...


CEO Compensation Analysis

Compensation vs Market: Alan's total compensation ($USD4.33M) is above average for companies of similar size in the Australian market ($USD2.71M).

Compensation vs Earnings: Alan's compensation has been consistent with company performance over the past year.


Leadership Team

NamePositionTenureCompensationOwnership
Alan Joyce
CEO, MD & Executive Director11.3yrsAU$6.57m0.20% A$17.0m
Olivia Wirth
Chief Executive Officer of Qantas Loyalty2.5yrsAU$1.95mno data
Andrew David
Chief Executive Officer of Qantas Domestic & Freight4.9yrsAU$2.37mno data
Gareth Evans
Chief Executive Officer of Jetstar Group2.5yrsAU$2.60mno data
Tino La Spina
Chief Executive Officer of Qantas International0.3yrsAU$2.33mno data
Vanessa Hudson
Chief Financial Officer0.3yrsno datano data
Robert Marcolina
Group Executive0yrsno datano data
Frances Reyk
Head of Investor Relations0yrsno datano data
Andrew Finch
General Counsel7.3yrsno datano data
Alan Milne
Head of Fuel & Environment7.4yrsno datano data

3.7yrs

Average Tenure

53yo

Average Age

Experienced Management: QAN's management team is considered experienced (3.7 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Alan Joyce
CEO, MD & Executive Director11.3yrsAU$6.57m0.20% A$17.0m
Paul Rayner
Independent Non Executive Director11.6yrsAU$317.00k0.020% A$1.6m
Richard James Goyder
Independent Chairman1.3yrsAU$584.00k0.0089% A$743.9k
Belinda Hutchinson
Independent Non-Executive Director1.8yrsAU$283.00k0.0011% A$92.3k
Antony Nigel Tyler
Independent Non-Executive Director1.3yrsAU$162.00kno data
Barbara Ward
Independent Non-Executive Director11.7yrsAU$320.00k0.0031% A$255.8k
Michael L'Estrange
Independent Non-Executive Director3.8yrsAU$223.00k0.0010% A$85.5k
Jacqueline Hey
Independent Non-Executive Director6.5yrsAU$211.00k0.0026% A$218.1k
Maxine Brenner
Independent Non-Executive Director6.5yrsAU$364.00k0.0021% A$171.9k
Todd Sampson
Independent Non-Executive Director5yrsAU$271.00k0.00096% A$80.5k

5.8yrs

Average Tenure

61yo

Average Age

Experienced Board: QAN's board of directors are considered experienced (5.8 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

Qantas Airways Limited's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Qantas Airways Limited
  • Ticker: QAN
  • Exchange: ASX
  • Founded: 1920
  • Industry: Airlines
  • Sector: Transportation
  • Market Cap: AU$8.387b
  • Shares outstanding: 1.47b
  • Website: https://www.qantas.com

Number of Employees


Location

  • Qantas Airways Limited
  • 10 Bourke Road
  • Mascot
  • New South Wales
  • 2020
  • Australia

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
QUBS.FOTCPK (Pink Sheets LLC)YesOrdinary SharesUSUSDAug 1995
QANASX (Australian Securities Exchange)YesOrdinary SharesAUAUDAug 1995
QANDB (Deutsche Boerse AG)YesOrdinary SharesDEEURAug 1995
QANCHIA (Chi-X Australia)YesOrdinary SharesAUAUDAug 1995
QABS.YOTCPK (Pink Sheets LLC)SPONSORED ADR NEUSUSDApr 2014

Biography

Qantas Airways Limited provides passenger and freight air transportation services in Australia and internationally. The company also offers air cargo and express freight services; and customer loyalty programs. As of June 30, 2019, it operated a fleet of 314 aircraft. The company was founded in 1920 and is headquartered in Mascot, Australia. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/02/26 10:33
End of Day Share Price2020/02/26 00:00
Earnings2019/12/31
Annual Earnings2019/06/30


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.