November 9, 2023
Top 10 Stock Qantas Airways Hold Recommendation
How to read the ranks
For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".
Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".
Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.
Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.
(NEW) Sentiment - quantifies professional analyst ratings and holdings as well as market pulse. Green = positive sentiment; red = skepticism (Only available to Premium Subscribers).
(NEW) 360° View - the ultimate rating with all financial and non-financial indicators.
Snapshot: Qantas Airways – Top 10 Stock in Australian Securities Exchange Index ASX 50
Qantas Airways is listed as a top 10 stock on November 09, 2023 in the market index ASX 50 because of its high performance in at least one of the Obermatt investment strategies. Only one consolidated Obermatt Rank is above-average. The company enjoys a positive professional investor sentiment, but all financial facts speak against a stock purchase. This is probably an investment into the future. Based on the Obermatt 360° View of 25 (25% performer), Obermatt assesses an overall hold recommendation for Qantas Airways on November 09, 2023.
Snapshot: Obermatt Ranks
When Obermatt identifies the Top 10 stocks in a market, it’s based on a certain investment strategy. The best performing stocks usually aren’t the ones that everyone is talking about (those are often "over-priced" and have low Value ranks).
For each investment strategy, we provide you with more detailed analysis and our recommendation. You see the ranks of the top 10 stocks ranked by that particular investment strategy (360° View, Sentiment, Value, Growth, Safety and Combined Financial Performance).
360° View: Obermatt 360° View Qantas Airways Hold
| 360 METRICS | November 9, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 48 |
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| GROWTH | ||||||||
| GROWTH | 13 |
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| SAFETY | ||||||||
| SAFETY | 9 |
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| SENTIMENT | ||||||||
| SENTIMENT | 94 |
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| 360° VIEW | ||||||||
| 360° VIEW | 25 |
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ANALYSIS: With an Obermatt 360° View of 25 (better than 25% compared with alternatives), overall professional sentiment and financial characteristics for the stock Qantas Airways are below the industry average. The 360° View is based on consolidating four consolidated indicators, with three out of four indicators below average for Qantas Airways. The consolidated Sentiment Rank has a good rank of 94, which means that professional investors are more optimistic about the stock than for 94% of alternative investment opportunities. But all other ranks are below average. The consolidated Value Rank has a rank of 48, which means that the share price of Qantas Airways is on the higher side compared with typical size in indicators such as revenues, profits, and invested capital. The consolidated Growth Rank also has a low rank of 13, meaning that the company exhibits below-average growth momentum when looking at financial metrics such as revenue, profit, invested capital growth, and stock returns. This means that growth is lower than for 13% of competitors in the same industry. Finally, the consolidated Safety Rank has a riskier rank of 9 which means that the company has a riskier financing structure than 91% comparable companies when looking at the amount of its debt, its refinancing requirements, and its ability to service debt. ...read more
RECOMMENDATION: With a consolidated 360° View of 25, Qantas Airways is worse than 75% of all alternative stock investment opportunities based on the Obermatt Method. As only the professional market sentiment (Sentiment Rank of 94) is above-average, and all other consolidated Obermatt Ranks are below peers, the stock investing proposition case is rather weak. The stock price is expensive for a company of this size in this industry, visible in the below-average Value Rank. Growth is below the competition based on the Growth Rank, and the company has more debt than other companies, according to the Safety Rank. So the question becomes: How important is the Sentiment Rank when all others are below average? When it comes to growth, the low rating might be justified if growth is expected in the future and not yet reflected in current performance. This is often the case for companies with intellectual property, such as technology and pharmaceutical companies. In the early phases, these companies are expensive compared with their size and may have a lot of debt on their books, as is the case here, as seen in the low Value and Safety Ranks. Future growth may be the strongest investment rationale in this case, which is only reflected by institutional investors' opinions. You pay more than the market average for this stock and invest in a rather debt-loaded enterprise, but it may be worth it if the future of Qantas Airwayṣ is bright. A small investment might be justified, but proceed with caution. ...read more
Sentiment Strategy: Professional Market Sentiment for Qantas Airways very positive
ANALYSIS: With an Obermatt Sentiment Rank of 94 (better than 94% compared with alternatives) for 2023, overall professional sentiment and engagement for the stock Qantas Airways is very positive. The Sentiment Rank is based on consolidating four sentiment indicators where all but one are above average for Qantas Airways. Analyst Opinions are at a rank of 80 (better than 80% of alternative investments), which means that currently, stock research analysts tend to recommend a stock investment in the company. The Professional Investors rank is also good at 78, which means that currently, professional investors hold more stock in this company than in 78% of alternative investment opportunities. Pros tend to favor investing in this company. In addition, Market Pulse has a rank of 56 which means that the current professional news and professional social networks are on the positive side when discussing this company (more positive news than for 56% of competitors). But Analyst Opinions Change has a below-average rank of 46, which means that stock research experts are currently changing their opinions for the worse when it comes to recommending this stock. In other words, they are getting more critical of investments in Qantas Airways. ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 94 (more positive than 94% compared with investment alternatives), Qantas Airways has a reputation among professional investors that is significantly higher than that of its competitors. This is an early sign of caution, even if the stock has significantly appreciated. If analysts change their opinions, the stock may become too expensive. If the price is on the way down, the trend may continue. This may be a stock with a good reputation and history, but it may have reached its breaking point by now. Investors should look at the Value Ranks as well. If they indicate trouble, it might just materialize in the future. ...read more
Value Strategy: Qantas Airways Stock Price Value below-average critical
ANALYSIS: With an Obermatt Value Rank of 48 (worse than 52% compared with alternatives), Qantas Airways shares are more expensive than the average comparable stock. The Value Rank is based on consolidating four value indicators, where half the indicators are below and half are above average for Qantas Airways. Price-to-Sales (P/S) is 91, which means that the stock price compared with what market professionals expect for future sales is lower than for 91% of comparable companies, indicating a good value concerning Qantas Airways's revenue size. The same is valid for expected Price-to-Profits (or Price / Earnings, P/E), more favorable than for 100% of alternatives. It is also positive for expected dividend yields with a Dividend Yield rank of 19 (dividends are expected to be higher than for 19% of other stocks). But, compared with other companies in the same industry, the Price-to-Book Capital ratio (also referred to as market-to-book ratio) is higher than average, making the stock more expensive. Only 99% of all competitors have an even higher price compared with book capital which puts the Price-to-Capital Rank for Qantas Airways to 1. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 48, is a hold recommendation based on Qantas Airways's stock price compared with the company's operational size and dividend yields. A low level of book capital means that the company has a business that is leaner on assets than its competitors. For instance, the company could be leasing its production facilities, or be more focussed on intellectual property, such as its brand and software, which is less visible in its book capital. If that is the case, the low Dividend Yield is also explained as such companies tend to invest their income into market development. The other good value ranks for Sales and Profits are encouraging indicators for the stock price value. ...read more
Growth Strategy: Qantas Airways Growth Momentum negative
ANALYSIS: With an Obermatt Growth Rank of 13 (better than 13% compared with alternatives), Qantas Airways shows one of the most restricted growth dynamics in its industry. There is little momentum in this company. The Growth Rank is based on consolidating four value indicators, where half of the indicators are below and half above average for Qantas Airways. Profit Growth, with a rank of 52 (better than 52% of its competitors), and Capital Growth, with a rank of 65, are both positive, which is a healthy sign for positive development. But Sales Growth has only a rank of 22, which means that, currently, professionals expect the company to grow less than 78% of its competitors, and Stock Returns are at a rank of 13. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 13, is a sell recommendation for growth and momentum investors. Stock returns that are a thing of the past can be less of a problem. Below-average revenue growth may be caused by divestments of underperforming businesses. If that is the case, then the positive developments of profit and capital growth are signs of a company with growth potential. If these are the reasons, overall growth is well on track to making this stock attractive for growth investors. ...read more
Safety Strategy: Qantas Airways Debt Financing Safety risky
| SAFETY METRICS | November 9, 2023 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 1 |
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| REFINANCING | ||||||||
| REFINANCING | 3 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 58 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 9 |
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ANALYSIS: With an Obermatt Safety Rank of 9 (better than 9% compared with alternatives), the company Qantas Airways has much riskier financing practices than comparable other companies, which means that their overall debt burden is significantly above the industry average. This doesn't mean that the business of Qantas Airways is also risky, it only means that the company is on the riskier side in respect to bankruptcy in case things turn sour, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with just one indicator above average for Qantas Airways. Liquidity is at 58, meaning the company generates more profit to service its debt than 58% of its competitors. This indicates that the company is safer when it comes to debt service. But Refinancing is riskier at a rank of 3, which means that the portion of the debt that is about to be refinanced is above average. It has more debt in the refinancing stage than 97% of its competitors. Leverage is also high at a rank of 1, which means that the company has an above-average debt-to-equity ratio. It has more debt than 99% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 9 (worse than 91% compared with alternatives), Qantas Airways has a financing structure that is significantly riskier than that of its competitors. High Leverage (a low Obermatt Leverage Rank) is good in good times, because it usually indicates that shareholders get higher returns. The good Liquidity performance of the company is an indicator that this is the case. However, if you expect an economic downturn, you may stay clear of this stock because they have an above-average debt level that needs refinancing soon. ...read more
Combined financial peformance: Qantas Airways Lowest Financial Performance
| COMBINED PERFORMANCE | November 9, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 48 |
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| GROWTH | ||||||||
| GROWTH | 13 |
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| SAFETY | ||||||||
| SAFETY | 58 |
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| COMBINED | ||||||||
| COMBINED | 6 |
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ANALYSIS: With an Obermatt Combined Rank of 6 (worse than 94% compared with investment alternatives), Qantas Airways (Airlines, Australia) shares have lower financial characteristics compared with similar stocks. Shares of Qantas Airways are low in value (priced high) with a consolidated Value Rank of 48 (worse than 52% of alternatives), show below-average growth (Growth Rank of 13), and are riskily financed (Safety Rank of 9), which means above-average debt burdens. ...read more
RECOMMENDATION: A Combined Rank of 6, is a sell recommendation based on Qantas Airways's financial characteristics. As the company Qantas Airways's key financial metrics all exhibit below-average performance, such as low value (Obermatt Value Rank of 48), low growth (Obermatt Growth Rank of 13), and risky financing practices (Obermatt Safety Rank of 9), it is a somewhat questionable stock investment, where the risk of paying too much for the shares is significant, unless the company has an exceptionally bright future. Such poor financial performance sometimes indicates that the company's business is all concentrated in some distant future. This is sometimes the case for high-tech or biotechnology companies. If they own properties that only provide cash flows in the future, the stock may look excessively expensive and risky today. In such cases, the Obermatt Method has limited value as it is based on facts we can observe today. If the facts are all in the future, stock investing becomes guesswork, and this should only be a driver in a limited number of investments that should only amount to a small fraction of a safe portfolio. ...read more
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