Qantas Rises 3.2% to A$9.44 on Bond Issue, June 01

Qantas Airways (ASX:QAN) gained 3.2% to A$9.44 on June 01 after launching a A$500 million bond offering of 6.659% senior unsecured notes due May 2036. The move signals confidence in the airline’s capital structure as it navigates post-pandemic demand normalisation and competitive pressures from new entrants. Meyka rates the stock B+ with a 12-month forecast of A$12.88, suggesting 36% upside from current levels.

Stock Price and Bond Financing

Qantas shares closed at A$9.44, up 3.2% on the day and 12.6% over the past month. The A$500 million bond issue provides liquidity and refinancing flexibility. The stock trades at a price-to-earnings ratio of 8.91, below the 50-day average of A$8.72, indicating relative strength after earlier weakness that left year-to-date returns down 10%.

Valuation and Analyst View

According to analysis from Simply Wall Street, Qantas trades at a 6.3% premium to an implied fair value of A$8.88. The valuation reflects normalising margins as global capacity returns and demand moderates. Meyka’s B+ rating and 12-month target of A$12.88 suggests the market has priced in only partial recovery from pandemic-era profitability peaks.

COVID Credits and Competitive Pressure

Qantas faces a regulatory shift on pandemic-era travel credits. The airline no longer allows customers to book flights using credits issued before September 30, 2021. Instead, customers must call to request refunds, creating operational friction. Separately, a proposed ultra-low-cost carrier called Zinc seeks A$200 million in backing to operate from Western Sydney International Airport, opening in October 2026, targeting high-traffic routes like Melbourne-Sydney that Qantas dominates.

Technical Momentum and Outlook

Qantas shows overbought momentum on the Commodity Channel Index at 134.10, with RSI at 65.72. The Stochastic indicator reads 88.89, signalling near-term pullback risk. With Meyka rating the stock B+ and analysts targeting A$8.88 fair value, the data points to limited downside but suggests caution on near-term rallies above A$9.50.

Final Thoughts

Qantas gained 3.2% after raising A$500 million in debt, but faces margin pressure as travel demand normalises. With Meyka’s B+ rating and A$12.88 12-month target, the stock offers upside if earnings stabilise above pre-COVID levels.

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The content shared by Meyka AI PTY LTD is solely for research and informational purposes.  Meyka is not a financial advisory service, and the information provided should not be considered investment or trading advice.