The year-long rally in Qantas shares may be coming to an end, according to brokers, despite the airline reporting a near-record annual profit performance of $2.39 billion and forecasting strong travel demand. Qantas is Australia’s largest airline, providing domestic and international flight services. The company’s share price had jumped 9.1 per cent to a record close of $12.12 before easing to $11.75 on Friday.
Despite Qantas’s strong earnings, analysts see limited room for further growth in major airline stock prices. RBC Capital Markets placed a short-term share price target of $10.75 on Qantas, suggesting a potential 9.3 per cent decline. Citi published a share price target of $12.20. Meanwhile, Virgin Australia fell 1.2 per cent to $3.45 amid concerns it might not meet earnings expectations, even with a 28 per cent rise in annual earnings. Citi has a “neutral” rating on Virgin, with a short-term target of $3.80.
Other winners in the travel sector included Kelsian, which operates tourism assets like Captain Cook Cruises and K’gari Beach Resort. Kelsian’s share price jumped nearly 25 per cent after announcing an underlying net profit after tax of $94.8 million. SiteMinder, a hotel booking software company, saw its share price jump over 20 per cent to $6.60 after reporting a 27 per cent increase in annual recurring revenue to $205 million. SiteMinder operates a hotel distribution platform, offering services that streamline the booking process for hotels.
Web Travel fell 5.7 per cent to $4.34 following a trading update pointing to softer-than-expected results. Flight Centre fell 4.2 per cent after reporting lower profits, while Helloworld reported a 7.3 per cent year-on-year drop in profit after tax, though its share price jumped following an “overweight” rating from Jarden. Wilson Asset Management is optimistic about Web Travel, expecting Reserve Bank of Australia rate cuts to boost the travel sector.
