Qantas Airways shares (ASX:QAN) fell 2.98% on Thursday to close at the low of the day at $10.11. Despite the pullback, Qantas’ share price sits 1.2% higher on the week, as markets continue to shift tone with oil prices, and geopolitical tensions in the Middle East taking the lead.
Down 4.8% in July, and 3.62% YTD does not read bullish, yet the stock has bounced 20% in the past three months to sit comfortably above the 50 day moving averages at A$9.95, and the 200 day at A$9.71. The golden cross formed last week, whilst a potential cup and handle pattern on the 1 year chart could be shaping up if sentiment can once again turn to the bull side of the aisle.
The move suggests investors are battling with optimism over the carrier’s Project Sunrise expansion and near-term sensitivity to macro variables, fuel costs, and execution risk. Recent softness follows a period in which the shares have climbed on expectations that Qantas is poised to deliver structurally higher earnings quality as its first Airbus A350-1000ULR aircraft arrive from late calendar 2026, and oil prices retreat from a $100 to an $80 handle on the week.
What Lay Ahead
Morgan Stanley recently lifted its 12-month price target to $12.50 from $10.60, retaining an Overweight rating and arguing that Qantas trades at roughly a 30% discount to global peers despite delivering return on invested capital near 20%. The broker raised fiscal 2027 earnings per share by 5% to $1.01 and increased international EBIT forecasts by 3% to 31% for the outer years, framing Sunrise as a catalyst for a structural multiple re-rating rather than just an earnings bolt-on.
The core fundamental anchor remains the airline’s first-half fiscal 2026 results and forward guidance, which underscored strong travel demand, higher revenue per available seat kilometre across domestic and international operations, and ongoing transformation benefits worth around $400 million this financial year. Management reaffirmed net debt at $5.6 billion, within its target range, and committed to capital returns totalling up to $450 million through dividends and buybacks in the interim period.
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Despite the improving picture over recent months, oil prices will continue to hold sway over sentiment whilst strikes in the Middle East continue. The $10 level could prove pivotal, with both the psychological support level, and the 50 day moving average under threat ahead of the month close.
