Qantas Airways Ltd: Analysis and Valuation

TABLE OF CONTENTS

TOPICS PAGE NO.

1.0 Executive Summary………………………………………………………3-4

2.0 Objectives…………………………………………………………………..5

3.0 Economic Analysis………………………………………………………..6-7

4.0 Industry Analysis…………………………………………………………..8-10

5.0 Company Profile..………………………………………………………….11

5.1 Key Financial Ratios………………………………………………11-12

6.0 Valuations………..…………………………………………………………15

6.1 Dividend Valuation Model…………………………………………14-16
6.2 Price-Earnings(P/E) Model.………………………………………..17

7.0 Limitations……………………………………………………………………18

8.0 Conclusions and Recommendations……………………………………...19

5.0 List of References……………………………………………………………20-22

APPENDIX

1 Qantas Airways Ltd – Key Facts…….………………………………….23-24
2 Ratio Calculations………………………………………………………. 25
3 Technical Analysis………..…..………………………………………….26-27

1.0 EXECUTIVE SUMMARY

This report tries to analyse and value the share of Qantas Airways limited from the perspective of a potential investor. The report has used share valuation techniques to put a value on the share of the company and recommends whether a potential investor should invest in the company at the prevailing market price or not. The report doesn’t directly suggesting an existing investor’s about offloading his/her investment in the company or keep sticking to it.

The report has employed top-down approach to share valuation – it starts with economic analysis, proceeds to industry analysis and finishes at fundamental or company analysis followed by the limitations of the analysis and recommendations. Economic analysis is suggestive of a slowing down in the Australian economy due to rising inflation and food prices. Interest rates are expected to stay the same in the current year amid fears of serious economic slump. Overall, Australian economy is still well placed as compared to its western counterparts and is expected to be resilient on the back of commodities export to China and India.

Australian air transport