December 21, 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 100
Qantas Airways is listed as a top 10 stock on December 21, 2023 in the market index ASX 100 because of its high performance in at least one of the Obermatt investment strategies. While only half of the consolidated Obermatt Ranks exhibit above-average performance, the professional market sentiment is positive and it may be a solid investment proposition, especially if a growth recovery is to be expected soon. Based on the Obermatt 360° View of 38 (38% performer), Obermatt assesses an overall hold recommendation for Qantas Airways on December 21, 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 | December 21, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 62 |
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| GROWTH | ||||||||
| GROWTH | 28 |
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| SAFETY | ||||||||
| SAFETY | 9 |
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| SENTIMENT | ||||||||
| SENTIMENT | 85 |
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| 360° VIEW | ||||||||
| 360° VIEW | 38 |
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ANALYSIS: With an Obermatt 360° View of 38 (better than 38% 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 half the metrics below and half above average for Qantas Airways. The consolidated Value Rank has an attractive rank of 62, which means that the share price of Qantas Airways is on the lower side compared with the typical size in indicators such as revenues, profits, and invested capital. This means that the stock price is lower than for 62% of alternative stocks in the same industry. The consolidated Sentiment Rank has a good rank of 85, which means that professional investors are more optimistic about the stock than for 85% of alternative investment opportunities. But the consolidated Growth Rank has a low rank of 28, which means that the company exhibits below-average growth momentum when looking at financial metrics such as revenue, profit, invested capital growth, and stock returns. The consolidated Safety Rank has a riskier rank of 9, meaning 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 38, Qantas Airways is worse than 62% of all alternative stock investment opportunities based on the Obermatt Method. Half of the consolidated Obermatt Ranks exhibit above-average performance, but the other half are below market levels. The company enjoys a good value (Value Rank of 62) and positive market sentiment in the professional investor community (Sentiment Rank of 85), but growth expectations are below-average (Growth Rank of 28) and the financing structure is on the risky side(Safety Rank of 9). This combination is rather dangerous, because high debt levels (low safety) require growth to finance the debt burden. The current low growth level may be temporary, because professionals are actually optimistic (positive sentiment). Good value is sometimes an indication that the company's future is challenging. The below-par growth performance may be the reason for this assessment. Companies with less growth typically have a lower price than fast-growing competitors. Even though professional investor sentiment is strong, we recommend further evaluating whether the future of Qantas Airways is as challenging as the stock's low price suggests. Since the professional community is optimistic, the stock might just be going through a more challenging phase now, indicating that timing might be good now. ...read more
Sentiment Strategy: Professional Market Sentiment for Qantas Airways very positive
ANALYSIS: With an Obermatt Sentiment Rank of 85 (better than 85% 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, with all four indicators above average for Qantas Airways. Analyst Opinions are at a rank of 74 (better than 74% of alternative investments), which means that, currently, stock research analysts tend to recommend a stock investment in the company. Analyst Opinions Change is also positive with a rank of 58, which means that stock research experts are changing their opinions for the better and recommending investing in the company. They are getting more optimistic about stock investments in Qantas Airways. The Professional Investors rank is 86, which means that currently, professional investors hold more stock in this company than in 86% of alternative investment opportunities. Pros tend to favor investing in this company. Finally, 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). ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 85 (more positive than 85% compared with investment alternatives), Qantas Airways has a reputation among professional investors that is significantly higher than that of its competitors. Since all market sentiment indicators are positive, the professional community highly recommends investment in the company. Does this mean Qantas Airways stocks are a safe investment? Far from it. Even professionals make mistakes. Especially in stock investing, there is a tendency to follow the leaders. Since trees don't grow to the heavens, such positive sentiment may also be interpreted as a danger sign. A lot of optimism can often be a sign of troubles to come, albeit unforeseen by most. ...read more
Value Strategy: Qantas Airways Stock Price Value better than average
ANALYSIS: With an Obermatt Value Rank of 62 (better than 62% compared with alternatives), Qantas Airways shares are more attractively priced than the majority of comparable stocks. 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 36 (dividends are expected to be higher than for 36% 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 62, is a buy 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 low
| GROWTH METRICS | December 21, 2023 | |||||||
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| REVENUE GROWTH | ||||||||
| REVENUE GROWTH | 27 |
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| PROFIT GROWTH | ||||||||
| PROFIT GROWTH | 48 |
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| CAPITAL GROWTH | ||||||||
| CAPITAL GROWTH | 69 |
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| STOCK RETURNS | ||||||||
| STOCK RETURNS | 17 |
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| CONSOLIDATED RANK: GROWTH | ||||||||
| CONSOLIDATED RANK: GROWTH | 28 |
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ANALYSIS: With an Obermatt Growth Rank of 28 (better than 28% compared with alternatives), Qantas Airways shows a below-average growth dynamic in its industry. There is limited momentum in this company. The Growth Rank is based on consolidating four value indicators, with three out of four indicators below average for Qantas Airways. Only Capital Growth has a good rank of 69, which means that currently professionals expect the company to grow its invested capital more than 48% of its competitors. The other three indicators are pointing South: Sales Growth has a rank of 27 which means that currently professionals expect the company to grow less than 73% of its competitors. Profit Growth with a rank of 48 and Stock Returns with a rank of 17 are also low (below 83% of alternative investments). ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 28, is a hold recommendation for growth and momentum investors. The good news from the invested capital side is surprising. A company with disappointing revenues, profits, and disappointed shareholders typically doesn't invest above average. Overall, the growth momentum for Qantas Airways is thus negative. As it is intriguing to see that company executives are optimistic about their investment policy, it is worthwhile looking into the details of the capital investment projects. They may indicate future growth and profits and thus if accompanied by a good value, a sign of good timing to invest in the stock. ...read more
Safety Strategy: Qantas Airways Debt Financing Safety risky
| SAFETY METRICS | December 21, 2023 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 1 |
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| REFINANCING | ||||||||
| REFINANCING | 5 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 61 |
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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 61, meaning the company generates more profit to service its debt than 61% of its competitors. This indicates that the company is safer when it comes to debt service. But Refinancing is riskier at a rank of 5, 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 95% 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 | December 21, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 62 |
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| GROWTH | ||||||||
| GROWTH | 28 |
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| SAFETY | ||||||||
| SAFETY | 61 |
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| COMBINED | ||||||||
| COMBINED | 9 |
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ANALYSIS: With an Obermatt Combined Rank of 9 (worse than 91% compared with investment alternatives), Qantas Airways (Airlines, Australia) shares have lower financial characteristics compared with similar stocks. Shares of Qantas Airways are a good value (attractively priced) with a consolidated Value Rank of 62 (better than 62% of alternatives) but show below-average growth (Growth Rank of 28), and are riskily financed (Safety Rank of 9), which means above-average debt burdens. ...read more
RECOMMENDATION: A Combined Rank of 9, is a sell recommendation based on Qantas Airways's financial characteristics. As the company Qantas Airways's key financial metrics exhibit good value (Obermatt Value Rank of 62) but low growth (Obermatt Growth Rank of 28) and risky financing practices (Obermatt Safety Rank of 9), it may be a risky investment, because debt in times of crises can make things worse. The good value, better than 62% of comparable companies, may indicate the company's future is challenging. If you believe that low growth is temporary or just due to a specific current event, you may conclude that the good value of the stock provides an attractive investment opportunity. ...read more
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