Qantas Airways Reaches All-Time High

By Aaditya GovindRao and Echha Jain

(Reuters) – Shares of Qantas Airways hit an all-time high on Wednesday after Jefferies analysts hiked their price target on Australia’s flag carrier, bolstered by low fuel costs and expectations of a dividend payment.

Qantas stock rose as much as 3.6% to a record high of A$7.830 by 0054 GMT. It was set for its strongest session since late August, ranking among the top gainers on the benchmark index, which was up 0.2%.

On Tuesday, Jefferies analysts raised their price target for the airline to A$10.53 from A$7.98, spurred by strong domestic and international demand, which has heightened expectations of a dividend payment along with its first-half earnings report in February.

A slowdown in oil prices, amid rising U.S. crude inventories, has further bolstered expectations for stronger earnings for the carrier.

"We expect demand to have remained stable following the release of FY24 results; however, the price of fuel has trended lower, allowing for more discounting and investment into customer service," stated the analysts.

Lower oil and jet fuel prices are benefiting Qantas both directly—by enhancing their earnings—and indirectly—by increasing the valuations of their global airline peers, said Owen Birrell, senior equity research analyst at RBC Capital Markets.

As of the last close, Qantas' shares had risen nearly 41% this year.