The Qantas Airways Limited (ASX: QAN) share price has been caught up in the market selloff on Tuesday.

At the time of writing, the airline operator's shares are down 3% to $6.30.

This means that its shares are now down over 7% over the last three sessions.

Should you buy Qantas shares?

One leading broker that is likely to see this as a buying opportunity is Goldman Sachs.

According to a recent note, its analysts have put a conviction buy rating and $8.30 price target on its shares.

This implies potential upside of almost 32% for Qantas' shares over the next 12 months.

Why is Goldman so bullish?

Goldman believes the market is thoroughly undervaluing Qantas based on its positive outlook and significantly improved earnings capacity. In fact, its analysts highlight that its shares are still trading below pre-COVID levels despite this. The broker explained:

As a key beneficiary of the re-opening of the world post-COVID, we expect the airline's traffic capacity to return to 96% of pre-COVID levels by FY24e, with the airline's earnings capacity (EPS) expected to exceed that of pre-COVID levels by ~65%.

We forecast a ~14% FY19-24e cumulative uplift in unit revenues (c. 2.5%pa), and ~50% drop-through of QAN's A$1bn+ structural cost-out program. QAN's current market capitalisation and enterprise value are 1% above and 14% below pre-COVID levels. As such, we believe QAN is not priced for a generic recovery, let alone prospects for improved earnings capacity. We continue to see upside associated with substantially improved MT earnings capacity and include QAN in our regional Conviction List.

All in all, this could make the recent weakness a great opportunity for investors to pick up Qantas shares at a discount.

The post Qantas shares have dumped 7% in 3 days. Should I buy? appeared first on The Motley Fool Australia.

Consumers, businesses and the share market are all, understandably, worried about an economic slowdown after ten consecutive months of interest rate rises.

But the recent reporting season showed how one industry is defying the odds, with Australians throwing cash at it like it's going out of fashion.

Wilsons equity strategist Rob Crookston was impressed.

"While a number of services businesses performed admirably in 1H23, none have quite measured up to the strength of those leveraged to the rebound in travel," he said in a memo to clients.

"[Travel companies] reported exceptional results as the significant pent-up demand following years of restrictions continued to be unleashed by consumers."

Travel stocks have done pretty well, but there's more to come

Despite many travel shares in the S&P/ASX 200 Index (ASX: XJO) taking off in price the past year, Crookston's team is convinced the boom will continue this year.

In fact, he reckons the market still hasn't fully woken up to how profitable the industry will be.

"We have been positive on the 're-opening thematic' for some time on the view that the market has underestimated the significant amount of pent-up demand for travel, which has helped keep air passenger volumes elevated, even in the face of elevated prices and the broader consumer slowdown," said Crookston.

"The reopening still has legs."

The hot demand will last well into the 2024 financial year, according to Crookston, who said consumers were prioritising travel costs over other non-discretionary expenses.

"China's recent re-opening from lockdown provides another tailwind for the sector."

The best ASX travel shares to buy right now

As for which specific ASX shares are the best exposures to this trend, Crookston's team is recommending investors go "overweight" on Qantas Airways Limited (ASX: QAN) and IDP Education Ltd (ASX: IEL).

The Qantas share price has already rocketed more than 32% over the past 12 months.

"We still believe Qantas is an attractive investment opportunity, given its discount to US peers, the ongoing strength in travel volumes, its leaner cost base post-pandemic, and the attractive industry structure with Virgin and Qantas operating as an effective duopoly."

The Wilson team had its bullish thesis confirmed with Qantas' first-half results.

"Qantas guided that travel demand is expected to remain strong into FY24, while group capacity continues to increase strongly and airfares are still elevated."

International education placement provider IDP is a recent addition to Wilson's focus portfolio, according to Crookston.

The Chinese government's recent ruling that its students must attend face-to-face classes to have credentials from Australian universities recognised is a major coup for IDP Education.

"Longer term, IDP Education is exposed to significant secular tailwinds, including the rise of India's middle class, increased university participation rates and rising international student mobility."

The reporting season update showed off some incredible numbers.

"IDP Education's 1H23 update demonstrated the ongoing acceleration in student placement volumes which increased +53% vs the prior comparable period."

IDP shares are currently trading 6.2% lower than they were a year ago.

The post 'Still has legs': Not too late to buy these 2 stellar ASX 200 shares, says expert appeared first on The Motley Fool Australia.

But some All Ordinaries shares are doing far better than that.

In fact, there are at least seven that have just hit new 52-week highs this session. Let's check 'em out.

7 ASX All Ords shares at new 52-week highs this Thursday

First up we have Adriatic Metals plc (ASX: ADT). This mining exploration company has interests in a number of metals, including silver. This company is having a whale of a time today, presently up a pleasing 5.4% at $3.80 a share.

Earlier today, Adriatic Metals hit $3.81, which is both the company's new 52-week high and all-time record high. The shares are up more than 22% year to date in 2023.

Next up there's Data#3 Ltd (ASX: DTL) to consider. All Ords tech share Data3 is also having a corker. This company's gain doesn't look too dramatic, up 0.6% at $7.64. But $7.64 is Data3's new 52-week and all-time high as well. This company has gained 15.6% over 2023 thus far.

A more well-known name in Myer Holdings Ltd (ASX: MYR) is another All Ords share on fire today. Myer is finally back over $1 a share for the first time since 2017, spiking 17.8% so far today to $1.12 a share.

The famous retailer reported earnings this morning, and investors have been delighted with a huge increase in profits and a special dividend. The company's new 52-week high is now $1.14 a share, putting Myer up a whopping 68% year to date.

Then there's Avita Medical Inc (ASX: AVH) to consider. All Ordinaries healthcare share Avita has also enjoyed a milder gain today, rising 1.64% up to $4.35 a share. But the company touched $.41 each this morning, which represents a new 52-week high for Avita.

This company has caught fire following its earnings last month. Avita is now up a massive 125% in 2023 so far.

What about Qantas, Eagers and Inghams?

Another familiar name in Qantas Airways Limited (ASX: QAN) is the next share worth checking out. This is another company that has seen investors flooding in after a successful earnings report in February, which included a $500 million share buyback program. '

The Qantas share price is bouncing around a bit today but hit a new 52-week high of $6.87 just after midday today. That puts it up almost 14% this year so far.

It's a similar story with All Ords car dealership company Eagers Automotive Ltd (ASX: APE). Eagers shares have also been playing jump rope today. But this afternoon has seen the company notch up a new 52-week high of $14.78 a share.

Again, it seems we have Eagers' latest earnings report to thank. Investors have been rediscovering their love for this company after last month's record dividend announcement. Eagers is now up 36% year to date.

Finally, let's check out All Ordinaries poultry share Inghams Group Ltd (ASX: ING). Inghams is yet another share that has been in both positive and negative territory this Thursday.

But when it was positive, it was positive. Inghams recorded a high of $3.30 a share soon after market open this morning – the new 52-week high.

Once more, it seems we have Inghams' latest earnings to look at to explain this new high. Investors initially didn't like what the company had to say last month. But the market seems to have reconsidered, with Inghams now up by more than 14% in 2023 to date.

The post 7 ASX All Ordinaries shares smashing new 52-week highs today appeared first on The Motley Fool Australia.

The Qantas Airways Limited (ASX: QAN) share price hit another 52-week high on Thursday.

The ASX 200 travel share ascended to $6.87 in morning trading, up 1.47% on the previous close.

Meantime, the S&P/ASX 200 Index (ASX: XJO) is flat today at 7,370 points.

Why is the Qantas share price taking off?

The Qantas share price is up 30% over the past six months compared to 6% for the ASX 200.

Qantas shares have been on a tear since mid-2022 when the ASX 200 began to regather from the shock of rising inflation and the commencement of a rising interest rate cycle for the first time since 2010.

But what's really pushing Qantas shares up is a rapid return to travelling post-pandemic.

Domestic and international travel is rising, and China's recent decision to relax some travel restrictions adds to the clear blue-sky outlook for the Qantas share price.

Could Qantas shares really hit $10?

According to The Australian today, top broker JPMorgan thinks Qantas shares could rise above $10 for the first time if earnings growth continues.

Analyst Anthony Longo forecasts the Qantas share price to reach $9 within a year. That would represent a 30% rise on today's new 52-week high. And Longo reckons it could rise to $10 or more from there.

Longo cites a few reasons for his bold predictions. They include the highly successful Qantas loyalty program, Virgin Australia's impending initial public offering (IPO), a fleet refresh, and increased airfares.

Longo expects Qantas to deliver a $2.5 billion profit before tax in FY23, increasing to $2.8 billion by FY25.

To put this into perspective, Qantas just reported an underlying profit before tax of $1.43 billion for 1H FY23. So, it's more than halfway towards achieving a full-year profit around the level Longo expects.

This compares to a 1H FY22 loss of $1.3 billion — talk about a rapid turnaround!

Are travellers paying to boost Qantas profits?

Increased domestic airfares almost 30% above those of 2019 are a bone of contention for travellers right now, with the Australian Competition and Consumer Commission stepping in to warn airlines to cut them.

According to abc.net.au, the average domestic ticket price across all fare types was 29% higher in nominal terms (actual prices) in January, or 13% higher in real terms (adjusted for inflation) than in 2019.

The ACCC has also revealed that Qantas is the most complained about airline.

What's been happening with Qantas stock lately?

The ASX 200 travel stock took a dive on 23 February when the company released its 1H FY23 results.

Despite reporting a $1.43 billion profit and a $500 million share buyback, Qantas was sold off.

As my Fool colleague James reported, this was because the result was slightly below expectations and capex expenditure was rising faster than anticipated.

Also, some investors may have been disappointed with the choice to do a buyback instead of resuming dividends.

However, a dramatic rebound began immediately.

The Qantas share price is now up 13% in the two weeks since the results were released.

The post Qantas share price could surge to $10: JPMorgan appeared first on The Motley Fool Australia.

The Qantas Airways Ltd (ASX: QAN) share price is shaking off the broader market malaise today and flying higher.

The S&P/ASX 200 Index (ASX: XJO) airline stock closed yesterday trading for $6.58 per share. Shares are currently changing hands for $6.67 apiece, up 1.4% in early morning trade.

This comes as the benchmark index reacts to overnight weakness in US markets to sink 0.73%.

Nor does the Qantas share price appear fazed by some unwanted, if largely expected, labour disruptions today.

What's happening with the labour dispute?

The Qantas share price won't be receiving any tailwinds from the company's refuelling crew subcontractors on Wednesday.

The workers at Melbourne Airport downed tools early this morning to kick off a 24-hour strike.

The employees have been trying, without apparent success, to renegotiate their pay and work conditions with Qantas and their direct employer, aviation labour contractor Rivet.

Transport Workers Union (TWU) national secretary Michael Kaine explained the motivation for the strike (as quoted by 9 News):

"They've had to deal with all the COVID crisis. Now we have a situation where they haven't had a pay increase for three years," Kaine said. "They've been negotiating with this company for a year, and they just need an opportunity to get some good pay increases but also an opportunity to rebuild these good aviation jobs."

Qantas is working around the issue and doesn't expect the targeted industrial action to impact flight schedules.

"Our operations team has done a great job of putting workarounds in place and at this stage we're not expecting any material impact to our flights on Wednesday," the airline stated.

Qantas does not directly employ the refuelling crews. ExxonMobil delivers the jet fuel for its Melbourne Airport flights and the oil giant subcontracts the refuelling segment to Rivet.

However, TWU acting branch secretary Mem Suleyman believes Qantas has plenty of sway over Rivet on any potential labour negotiations.

"As Rivet's major client, accounting for at least 60 per cent of the work, Qantas has the ability and responsibility to dictate through its contracts with labour providers that workers refuelling its planes are receiving fair pay and safe working conditions," Suleyman wrote in a letter to Qantas management.

Qantas share price snapshot

As you can see in the chart below, the Qantas share price has been a strong outperformer over the past 12 months, up 47%.

The post Qantas share price flying higher despite new labour disruptions appeared first on The Motley Fool Australia.

The Qantas Airways Limited (ASX: QAN) share price hit a new 52-week high today of $6.71. This represents its highest price since the COVID-19 crash.

Shares in the airline have done well for shareholders over the last year, rising by 45%. In the past six months, they have gained around 25%.

The Qantas share price has been steadily climbing since the initial reaction to the airline's FY23 half-year result. From 23 February 2023 to now, it has gone up by almost 10%.

Investors may have harked back to that result today, as well as taking in news the airline is planning to significantly increase its workforce.

Strong travel demand continues

The company recently announced that in the first six months of the year, it made underlying net profit before tax of $1.43 billion and statutory net profit after tax (NPAT) of $1 billion. This was a big swing compared to the losses it had been seeing during COVID. The recovery has certainly been helpful for the Qantas share price.

Thanks to the strong financials, net debt declined to $2.4 billion and the business announced a share buyback of up to $500 million.

Qantas pointed to a "material improvement in operational performance and customer satisfaction".

Qantas CEO Alan Joyce said:

When we restructured the business at the start of COVID, it was to make sure we could bounce back quickly when travel returned. That's effectively what's happened, but it's the strength of the demand that has driven such a strong result.

Fares have risen because of higher fuel costs, but also because supply chain and resourcing issues meant capacity hasn't kept up with demand. Now those challenges are starting to unwind, we can add more capacity and that will put downward pressure on fares.

In terms of overheads, we expect the costs we're carrying from the extra operational buffer will start unwinding from this half and into next financial year.

Investors may not have liked the sound of "downward pressure" on fares, considering how much profit Qantas is currently making from those high fares.

However, the airline said that travel demand is expected to remain strong throughout FY23 and into FY24. Domestic and international capacity is expected to increase throughout the second half of FY23, though this could come with moderating fares. However, fares are expected to remain "significantly above" FY19 levels.

That does sound promising for profitability and the Qantas share price.

Growth plans

Last week, the company announced that it expects to create more than 8,500 new highly skilled jobs, including new pilots and engineers.

Over the next decade, Qantas is expecting to grow its number of people from 23,500 currently to 32,000 by 2033.

While hiring more people doesn't necessarily influence the Qantas share price, it could suggest the business is expecting to become much bigger and, by extension, could be making more profit.

Qantas share price snapshot

Over the past month, the Qantas share price is up around 0.5%.

The post Qantas share price takes off to new multi-year high on Tuesday appeared first on The Motley Fool Australia.

Qantas Airways Ltd (ASX: QAN) shares are up 0.9% in morning trade on Friday.

The S&P/ASX 200 Index (ASX: XJO) airline stock closed yesterday trading for $6.53 per share. Shares are currently trading for $6.59 apiece.

That's today's price action for you.

Now, here's how Qantas plans to grow its share of the global air travel market.

What are the airline's growth plans?

If you own Qantas shares, you'll be helping fund a big growth push in the ASX 200 airline's staffing as post-pandemic travel demand surges.

The company reported it intends to create more than 8,500 new high-skill jobs over the next 10 years. This comes as the airline acquires new aircraft to meet continued expected growth in long-term demand.

The new jobs will include pilots, engineers, cabin crew and airport staff.

All told, Qantas expects to hire more than 30,000 frontline people by 2033, which includes replacing workers who retire or leave for other reasons.

The ASX 200 airline currently employs some 23,500 people and expects that will grow to 32,000 over the next decade.

To help ensure it has enough workers with the needed engineering skills, Qantas announced it will establish the Qantas Group Engineering Academy in Australia. The academy can train as many as 300 engineers a year.

"We order aircraft up to 10 years in advance, so we need to think similarly long-term about the people and skills we need to operate them," Qantas CEO Alan Joyce said.

Joyce added:

In the near term, we're gearing up to meet the growth in all of the markets we serve. We have more aircraft arriving every month, and that means we need more pilots, engineers, cabin crew and others.

Over the next 18 months, we expect to create more than 2,000 new jobs plus replacing natural attrition.

 "Wherever you look there is a skills gap, and according to the OECD, Australia has the second highest labour supply shortage," Brendan O'Connor, minster for skills and training, said.

"Australia needs thousands of new workers and engineers to enter the aviation industry to ensure secure jobs and a thriving sector," O'Connor added. "And we welcome this investment by Qantas to help develop these future skills needs."

How have Qantas shares been performing?

As you can see in the chart below, Qantas shares have been flying higher over the past 12 months, up 28%.

The post Own Qantas shares? Here's how the ASX 200 airline plans to grow appeared first on The Motley Fool Australia.

Two blue chip ASX 200 shares that have been named as buys recently are listed below. Here's what you need to know about these shares:

Goodman Group (ASX: GMG)

Goodman could be a blue chip ASX 200 share to buy this month.

The leading industrial property company notes that its global property expertise, integrated own+develop+manage customer service offering, and significant investment management platform helps create innovative property solutions that meet the individual requirements of its customers, while seeking to deliver long-term returns for investors.

This strategy has delivered the goods over the last decade with Goodman recording strong earnings and above-average returns.

The good news is that analysts at Citi believe that this strong form can continue. As a result, the broker has put a buy rating and $24.00 price target on its shares. It commented:

GMG's 1H23 result highlighted the extent of tailwinds still existing for industrial property which make for a strong earnings growth outlook not just this year but into multiple years in the future. […] We believe GMG will continue to outperform given its high-quality exposure and strong earnings growth potential in an uncertain macro environment.

Qantas Airways Limited (ASX: QAN)

Another blue chip ASX 200 share that has been named as a buy is Qantas.

It is of course the flag carrier airline of Australia and the operator of the Qantas and Jetstar brands. The company also has a lucrative loyalty business and an important freight business.

Goldman Sachs is a big fan of the company and has been impressed with its post-pandemic transformation. So much so, it believes the market is seriously undervaluing its shares at present.

Goldman has a conviction buy rating and $8.30 price target on its shares. It commented:

Notwithstanding a decline in unit revenues (and group capacity still at 96% of pre-COVID), our estimated FY24e EPS sits 65% above pre-COVID levels. Despite this, QAN's market capitalisation is 1% below pre-COVID levels (EV 14% lower). We acknowledge broader macro uncertainty at this point in the cycle, but we believe the current share price does not reflect the group's improved earnings capacity.

The post Boost your portfolio with these blue chip ASX 200 shares in March: experts appeared first on The Motley Fool Australia.

Qantas Airways Limited (ASX: QAN) shares are up 1.5% in Tuesday trading as we head into the lunch hour.

The S&P/ASX 200 Index (ASX: XJO) airline stock closed yesterday trading for $6.28 per share. Shares are currently changing hands for $6.38 apiece.

That's today's price action for you.

Now, what's this about a new contender for the top job?

A three-way race for the top job?

Qantas shareholders won't know for some time yet who'll be taking over the reins of the ASX 200 airline.

Long-standing CEO Alan Joyce has reiterated that he will remain in the top post until "at least" the end of this year.

But that's not stopping analysts from speculating.

The two most likely candidates to date were Vanessa Hudson, Qantas chief financial officer, and Olivia Wirth, the CEO of Qantas Loyalty.

Now they've been joined by a new potential contender, Cameron Wallace, a former executive at Air New Zealand.

This comes as Qantas returns the management of its domestic and international segments to two separate portfolios, requiring two CEOs. The two segments, which were combined during the pandemic, will be separated commencing 1 July.

It also comes with the announcement that the current CEO of the combined Qantas Domestic and International portfolio, Andrew David, is retiring in September.

Wallace will take over as CEO of Qantas International and Freight from 1 July.

David will stay on as CEO of Qantas Domestic until his retirement. Qantas said it will soon commence a recruitment process for a new CEO of Qantas Domestic, to take over from David in September.

"At the start of the pandemic, we rationalised the two CEO roles for Qantas Domestic and Qantas International down to one given what was happening to our business," Joyce said.

Joyce added:

With Andrew retiring and given the amount of investment now in the pipeline, it makes sense to again have separate CEOs for the International and Domestic businesses, which are both back to generating billions in revenue each year…

The Qantas Group has always been able to attract top talent and Cam Wallace is one of the best airline executives in the region.

Wallace said Qantas is "the world leader in opening up direct international routes, and Project Sunrise is one of the most exciting things happening in aviation".

How have Qantas shares been faring?

As you can see on the chart below, Qantas shares have strongly outperformed over the past 12 months, up 26%.

The post Own Qantas shares? Guess who just joined the race to be the next CEO appeared first on The Motley Fool Australia.

The airline operator's shares rose 2% to $6.28, whereas the ASX 200 index dropped 1.1% to 7,224.8 points.

Can the Qantas share price keep flying?

The good news for investors is that one leading broker believes Qantas shares are barely off the runway.

According to a note out of Goldman Sachs, its analysts have responded to the company's half-year results by retaining their buy rating with an improved price target of $8.30.

Based on the current Qantas share price, this implies potential upside of 32% for investors over the next 12 months.

What did the broker say?

Goldman Sachs was pleased with Qantas' half-year results, which was largely in line with expectations. It commented:

$1.43bn of PBT was within 1% of GSe and consensus and in the top-half of management's guidance range of $1.35-1.45bn. Adjusted net debt was $2.4bn (-1% vs GSe) compared with $3.9bn as at Jun22. This compares with QAN's revised (dynamic) target range of $3.9-4.8bn. The company also announced a $500m buyback in 2H23, vs GSe $400m.

And while the broker acknowledges that airfares may now have peaked, it doesn't expect this to stop Qantas from delivering bumper earnings in the near term. It feels this makes its shares great value, particularly in comparison to pre-COVID times. It explained:

Notwithstanding a decline in unit revenues (and group capacity still at 96% of pre-COVID), our estimated FY24e EPS sits 65% above pre-COVID levels. Despite this, QAN's market capitalisation is 1% below pre-COVID levels (EV 14% lower). We acknowledge broader macro uncertainty at this point in the cycle, but we believe the current share price does not reflect the group's improved earnings capacity. Our 12m TP increases slightly to A$8.30 (A$8.20 prev.); retain Buy.

The post Broker tips Qantas share price to fly significantly higher appeared first on The Motley Fool Australia.

The S&P/ASX 200 Index (ASX: XJO) started the week out on the wrong foot, falling 1.12% to close at 7,224.8 points.

And it was the giant S&P/ASX 200 Materials Index (ASX: XMJ) that weighed heaviest. It fell 3.15% following a rough Friday session for commodity prices.

Gold futures price dropped 0.5% to US$1,817.10 an ounce on Friday and iron ore futures dumped 0.1% to US$125.85 a tonne. At the same time, copper futures dumped 2.7% and aluminium futures tumbled 2%.

But not all commodities suffered. The S&P/ASX 200 Energy Index (ASX: XEJ) jumped 0.25% on the back of stronger oil prices.

Brent crude oil and US Nymex crude oil each lifted 1.2% to US$83.16 a barrel and US$76.32 a barrel respectively on Friday.

Looking at today's earnings releases, the Downer EDI Ltd (ASX: DOW) share price plummeted 24% on lower profits and a guidance downgrade, while today's top performer also posted earnings this morning. Let's take a look at how it performed in 2022.

Top 10 ASX 200 shares countdown

TPG Telecom Ltd (ASX: TPG) shares outperformed all other ASX 200 stocks today after the company revealed a 354% increase in full-year profits, coming in at $513 million.

These shares made today's biggest gains:

Our top 10 shares countdown is a recurring end-of-day summary to let you know which companies were making big moves on the day. Check in at Fool.com.au after the weekday market closes to see which stocks make the countdown.

The post Here are the top 10 ASX 200 shares today appeared first on The Motley Fool Australia.

The current reporting season has put up its share of surprises, both pleasant and unpleasant.

To help you sort through the information overload, Morgans analyst Andrew Tang this month has been regularly posting which ASX shares are the best buys, based on the latest reporting.

Here are six of his latest recommendations:

'Perplexed' at why this stock is still on the runway

The Qantas Airways Limited (ASX: QAN) share price has rocketed 44.8% since July, but it's still below pre-COVID highs.

The latest results have convinced Tang that there are further gains to come.

"We continue to view the discount being applied to Qantas vs pre-COVID multiples as unwarranted," he said on the Morgans blog.

"Qantas' 1H23 result was strong with underlying net profit before tax at the top end of its guidance range driven by strong travel demand, high airfares, and cost improvements from its $1 billion transformation program."

According to Tang, cash flow, balance sheet and capital management were all highlights.

But despite the positive report, Qantas stocks tumbled on the day.

"We are perplexed at Qantas' share price reaction today. It provided bullish outlook commentary around the strength of travel demand likely continuing well into FY24, which we thought would have driven a rerating."

Prospects are 'so strong'

With the economy potentially tanking in 2023, retailers are currently on a hiding to nothing.

But Tang rates Universal Store Holdings Ltd (ASX: UNI) as a buy.

"Universal reported strong growth in 1H23, with sales up 35% — 5% above forecast. And post-AASB 16 net profit after tax up 44% — 4% above forecast," he said.

"Our post-AASB 16 EBITDA estimates are effectively unchanged in FY23 and rise 2% in FY24."

Meanwhile Tourism Holdings Ltd (ASX: THL), which listed on the ASX in early December after a merger with Apollo Tourism, reported a "strong" result.

"[It] materially beat our forecast as the business is recovering strongly from the COVID tourism downturn, while benefiting from historically high rental yields and record vehicle sales margins."

The profit projections were upgraded, and so have Morgans' expectations.

"The prospects for the merged group are so strong that THL will now resume dividends with the FY23 result — one year earlier than expected," Tang said.

"We continue to believe that the merger synergies are conservative and will be upgraded over time."

And the shares are still cheap, in Tang's opinion.

"Trading on an FY25F (recovery year) PE of 8.8x, we believe THL is materially undervalued."

'Building a sustainably higher earnings base'

A few days ago, Tang singled out car dealership business Peter Warren Automotive Holdings Ltd (ASX: PWR) as a buy.

Similarly, this time he likes the look of Eagers Automotive Ltd (ASX: APE).

"Eagers' underlying profit before tax of $405.2 million (+1% on pcp) slightly beat expectations. 2H22 PBT of $210 million was up 7.7% half-on-half."

Pleasingly, the order book growth is continuing at around 30% per half.

"The order book has over a two-year run off period (yet to commence) providing solid near-term visibility," said Tang.

"Cycle aside, Eagers is executing on building a sustainably higher earnings base via further consolidation, ongoing efficiency, new OEM strategies and new sales channels."

Rural construction goods and services provider Maas Group Holdings Ltd (ASX: MGH) is also a buy for Tang.

"Maas Group delivered HY23 earnings at the top end of guidance and re-affirmed full year guidance for pro forma EBITDA of $150 to $180 million," he said.

"In reaffirming guidance, the company flagged that residential lot sales would be lower than the pcp of 270 lots (incl build-to-rent), with this weakness offset by strength across the other divisions."

Tang admitted the latest report reflected "a challenging period" that included heavy rains and a plummeting real estate market.

One for patient investors

Private hospital provider Ramsay Health Care Ltd (ASX: RHC) has had a drama-filled few years with COVID-19 lockdowns killing elective surgeries and a takeover suitor walking away last year.

Tang was happy with the reporting season update though.

"1HFY23 results beat [expectations], with revenue gains across all regions on increased surgical activity, although profit was aided by NRIs, acquisitions and government payments."

The post-pandemic recovery is slow going though, due to labour shortages and supply cost inflation.

It will get there eventually though, Tang reckons.

"We continue to view a gradual uplift in volumes and improving leverage, given improved payor terms, better recruitment/retention, likely French government revenue guarantee extension (until 31 Dec 2023), and additional capacity gains."

The post 6 ASX shares to pounce on from a boom reporting season: Morgans appeared first on The Motley Fool Australia.

Here's why brokers think investors ought to buy them next week:

Coles Group Ltd (ASX: COL)

According to a note out of Citi, its analysts have retained their buy rating on this supermarket giant's shares with an improved price target of $20.20. Citi was impressed with Coles' first-half result, noting that it came in comfortably ahead of its expectations. Looking ahead, the broker believes shopping trends are favourable for Coles. It also feels the market is being too negative on the Ocado partnership. The Coles share price ended the week at $18.08.

IDP Education Ltd (ASX: IEL)

A note out of Goldman Sachs reveals that its analysts have retained their buy rating on this language testing and student placement company's shares with a trimmed price target of $35.70. Although IDP's half-year earnings were a touch below expectations, Goldman was impressed with its revenue growth and operating leverage. The broker expects this trend to continue and is forecasting double-digit revenue growth and further margin expansion through to at least FY 2025. The IDP share price was fetching $29.11 at Friday's close.

Qantas Airways Limited (ASX: QAN)

Analysts at Morgans have retained their add rating on this airline operator's shares with a slightly reduced price target of $8.35. This follows the release of a strong half-year result which revealed earnings at the top end of its guidance range. Morgans was perplexed by the market's poor reaction to the result, particularly given the prospect of strong travel demand continuing well into FY 2024. In light of this, it believes a buying opportunity has arrived for investors. The Qantas share price ended the week at $6.16.

The post Top brokers name 3 ASX shares to buy next week appeared first on The Motley Fool Australia.

Two ASX 200 shares that impressed analysts at Goldman Sachs are listed below. Here's why the broker believes they are post-results buys:

IDP Education Ltd (ASX: IEL)

Goldman Sachs believes that this language testing and student placement company is an ASX 200 share to buy.

Although IDP's earnings were a touch short of expectations, the broker was impressed with its strong revenue growth and operating leverage. Its analysts believe there's plenty more to come and are forecasting strong growth out to at least FY 2025.

In light of this, it has reiterated its buy rating with a $35.70 price target. The broker commented:

While the 1H23 result was modestly below our EBIT forecast (-4%) the company delivered strong revenue growth (+26%) and operating leverage (EBIT margin +476 bps). We expect double digit revenue growth and c.200bps p.a. of EBIT margin expansion to continue over the forecast period, justifying the stock's premium rating. Our revised $35.70 TP is based on DCF and implies 25% total return to last close. We maintain our Buy rating.

Qantas Airways Limited (ASX: QAN)

Another ASX 200 share that Goldman believes is a buy is airline operator, Qantas.

Goldman was impressed with its performance during the first half and expects more of the same in the second half. And while it suspects that airfares may now have peaked, it doesn't expect that to prevent strong earnings through to at least FY 2025.

In fact, the broker believes this will position Qantas to undertake an $800 million on-market share buy-back next year.

As a result, the broker has retained its conviction buy rating with an $8.30 price target. It commented:

Fares (and therefore unit revenues) may have peaked (we forecast a 15% yoy unit revenue decline in FY24e representing a c2.5% CAGR vs FY19). However, we believe QAN's earnings capacity has reset. Declines in unit revenues are tied to and mitigated by higher capacity. This is complemented by roll-off of significant transitional costs ($400m in FY23), reiterated by management. This is the key driver of the 9% uplift in our FY24e PBT forecast. We note that our FY24e EBIT margin of 12.4% compares with an estimated ~13% implied by management's profitability targets. Beyond this, we incorporate continued capital management ($800m buyback in FY24e), noting that ND would be below management's target range that is likely to increase over time. This translates into a 13% uplift in EPS to 94c (flat yoy).

The post Buy these ASX 200 shares following their results: Goldman Sachs appeared first on The Motley Fool Australia.

While the airline has seen a rough initial response to its numbers, it's important to remember that it has risen substantially over the last six months.

Investors can get more and more optimistic about the business, but then become too positive in the short term.

That may have happened here, even though Qantas revealed a very strong set of numbers considering what has happened over the last three years.

Earnings recap

The airline revealed that it achieved underlying profit before tax of $1.43 billion and statutory net profit after tax (NPAT) of $1 billion. In statutory earnings per share (EPS) terms, the amount made was 53.9 cents.

After such a strong recovery of earnings, Qantas saw its net debt reduce to $2.4 billion.

With the balance sheet in such rapidly-improving shape, the company decided to launch a $500 million share buyback.

It outlined a "material improvement" in operational performance and customer satisfaction, while also pointing to ongoing investment in lounges, technology and customer experience.

Qantas also said that it has an updated fleet plan, including turning nine purchase right options into firm orders for Airbus A220s.

How is the outlook shaping up?

The Qantas boss Alan Joyce said:

Fares have risen because of higher fuel costs, but also because supply chain and resourcing issues meant capacity hasn't kept up with demand. Now those challenges are starting to unwind, we can add more capacity and that will put downward pressure on fares.

In terms of overheads, we expect the costs we're carrying from the extra operational buffer will start unwinding from this half and into next financial year.

Returning to profit means we can get back to reinvesting for our customers, which is clear from the network, fleet and lounge announcements we've made, and from the Project Sunrise cabins we're previewing. Importantly for our investors, this also sets us up to deliver long term shareholder value.

That investment includes $100 million spent on expanding domestic and international lounges over three years.

The average fare price is around 20% higher than in 2021. The Qantas share price is benefiting from the strength of the revenue that it's generating from each flight.

But, the business is expecting travel demand to remain strong over the current financial year and into FY24.

Qantas' domestic capacity is expected to increase from 94% to 103% through the second half of FY23. Meanwhile, international capacity is expected to increase from 60% to 81% through the second half of FY23.

It stated in its outlook guidance that fares are expected to moderate as capacity increases, but will remain "significantly above FY19 levels." The fuel cost for FY23 is "expected to be $4.8 billion" with hedging in place.

My views on the Qantas share price

It was unfortunate for shareholders that the market didn't like what the airline reported.

However, I thought there were a number of positives including a return to making major profit, net debt reduction and launching another share buyback, which theoretically improves the value of each remaining share.

With capacity still returning, I think that's a good sign for Qantas' earnings in the second half of FY23 and at least for the start of FY24.

I don't think Qantas will deliver massive outperformance from here in the shorter term, but I like what the airline is doing and I think that it can keep making good profits now that the pandemic effects are wearing off.

With the bigger profits, Qantas can keep paying shareholder returns, like share buybacks and possibly dividends in the future. I think Qantas is a long-term buy.

The post Should I buy the dip on Qantas shares? appeared first on The Motley Fool Australia.

Will the market be able to bounce back from this on Friday? Here are five things to watch:

ASX 200 expected to rise

The Australian share market looks set to edge higher on Friday following a volatile but positive night on Wall Street. According to the latest SPI futures, the ASX 200 is expected to open 1 point higher this morning. In late trade in the United States, the Dow Jones is up 0.2%, the S&P 500 is up 0.5%, and the NASDAQ index is up 0.7%. The US market was up strongly, then down heavily, and now looks set to finish higher.

Oil prices rebound

Energy producers Beach Energy Ltd (ASX: BPT) and Woodside Energy Group Ltd (ASX: WDS) could have a good finish to the week after oil prices rebounded overnight. According to Bloomberg, the WTI crude oil price is up 1.9% to US$75.35 a barrel and the Brent crude oil price is up 1.9% to US$82.16 a barrel. Tightening supplies boosted prices.

Pilbara Minerals results

The Pilbara Minerals Ltd (ASX: PLS) share price will be one to watch on Friday. After the market close yesterday, the lithium giant released its half-year results. It posted a 647% increase in revenue to $2.18 billion and a 989% increase in profit after tax to $1.24 billion. This allowed the company to declare its inaugural 11 cents per share fully franked interim dividend. Management also upgraded its FY 2023 production guidance.

Gold price slumps

Gold miners Newcrest Mining Ltd (ASX: NCM) and St Barbara Ltd (ASX: SBM) could have a subdued finish to the week after the gold price dropped overnight. According to CNBC, the spot gold price is down 0.6% to US$1,830.6 an ounce. Gold hit a two-month low on rate hike concerns.

Qantas is a buy

The Qantas Airways Limited (ASX: QAN) share price is great value according to analysts at Goldman Sachs. In response to its first-half results, the broker has retained its conviction buy rating with an $8.30 price target. It commented: "We believe the current share price does not reflect the group's improved earnings capacity."

The post 5 things to watch on the ASX 200 on Friday appeared first on The Motley Fool Australia.

But let's try to stay positive this Thursday. So instead of dwelling on all of that, it's now time to take a look at the stocks dominating the ASX 200 shares trading volume charts right now, according to investing.com.

The 3 most traded ASX 200 shares by volume this Thursday

Pilbara Minerals Ltd (ASX: PLS)

First up this Thursday is the ASX 200 lithium producer Pilbara Minerals. So far today, a chunky 19.85 million Pilbara shares have bounced around the ASX. There's been no fresh news out of Pilbara today after the new debt facility announcement yesterday.

But that hasn't stopped the Pilbara share price from rocketing a pleasing 4.46% so far this session to $4.45 a share. Thus, it is probably this sharp move higher that is causing the volumes we see.

Qantas Airways Limited (ASX: QAN)

ASX 200 airline Qantas is our next share this session. As it currently stands, a decent 21.69 million Qantas shares have flown over to new owners thus far. This one is a little easier to work out.

Qantas delivered its latest earnings report this morning. And investors have given the report card a convincing thumbs down. As we covered earlier, Qantas reported a 222% rise in revenues and swung back to profitability. The airline also announced a new share buyback program.

But perhaps investors were expecting more, maybe even the resumption of dividend payments. That's going off of Qantas shares' hefty 6.49% loss so far today, which is the probable cause of so many shares trading.

AMP Ltd (ASX: AMP)

Our third and most traded ASX 200 share today is financial services company AMP. AMP has seen a sizeable 23.64 million shares trade hands at this point of the session. There's been no fresh news out of AMP since it reported its own earnings earlier this month, save for another routine share buyback notice today.

This could be causing the high volumes on display. But the AMP share price has also displayed some volatility today, bouncing between $1.07 and $1.09, which could also be helping.

The post Here are the 3 most heavily traded ASX 200 shares on Thursday appeared first on The Motley Fool Australia.

Four ASX shares that are falling more than most today are listed below. Here's why they are dropping:

Platinum Asset Management Ltd (ASX: PTM)

The Platinum share price is down 17% to $1.89. Investors have been selling this fund manager's shares following the release of a disappointing half-year result. Platinum reported a 20.5% decline in revenue to $102.26 million and a 37.4% decline in net profit to $37.56 million. This led to the company slashing its dividend by 30% to 7 cents per share.

Qantas Airways Limited (ASX: QAN)

The Qantas share price is down 6.5% to $6.05. This follows the release of the airline operator's half-year results. Although the Flying Kangaroo delivered a profit before tax at the top end of its guidance range and announced a $500 million on-market share buy-back, investors appear to have been betting on an even stronger result.

Red 5 Limited (ASX: RED)

The Red 5 share price is down 23% to 13.5 cents. This morning, this gold miner announced the completion of an $80 million institutional placement. These funds were raised at a 23% discount of 13.5 cents per share. The proceeds will ensure Red 5 is well funded, with sufficient working capital to support steady-state operations at the newly commissioned King of the Hills mine.

Zip Co Ltd (ASX: ZIP)

The Zip share price is down almost 7% to 52.7 cents. Investors have been selling this buy now pay later (BNPL) provider's shares following the release of its half-year results. Although Zip reported record revenue, it still recorded a loss after tax of $243 million. Nevertheless, management believes it has sufficient cash to see it through to positive group cash EBTDA in FY 2024.

The post Why Platinum, Qantas, Red 5, and Zip shares are dropping today appeared first on The Motley Fool Australia.

The Qantas Airways Limited (ASX: QAN) share price is in the dumps on Thursday despite the company announcing another massive on-market share buyback. Meanwhile, passive income investors might be disappointed by the lack of dividend from the travel giant.

The S&P/ASX 200 Index (ASX: XJO) airline operator posted a $1.4 billion profit for the first half of financial year 2023 this morning, as The Motley Fool Australia reported earlier.

Right now, the Qantas share price is tumbling 6.03% to trade at $6.08.

Let's take a closer look at the airline's newly announced $500 million buyback and when investors might expect a dividend from the stock.

Qantas shares slump on buyback and lack of dividend

Qantas will restart buying its shares on market next month after snapping up $400 million worth of stock last half for an average price of $5.78 apiece.

It comes after investors forked out more than $1 billion to help fund the airline's recovery in 2020, as CEO Alan Joyce commented today. He added:

[The first half profit] is the recovery our people, our shareholders – and in many respects, our customers – have been waiting for. Because this result isn't just about a single number. Ultimately, it's about getting back to our best by reinvesting in the national carrier.

Of course, while passive income investors would likely prefer a cash dividend over a share buyback, both ultimately benefit shareholders. That's because reducing the number of shares on market bolsters the value of those remaining.

And news of the capital return likely hasn't surprised eagled-eyed market watchers.

Broker Macquarie previously tipped Qantas to buy back up to $800 million worth of its shares amid a faster-than-expected recovery.

Meanwhile, Goldman Sachs was forecasting the airline to announce another $400 million buyback and declare $90 million of dividends today. It's still tipping the stock to return to dividend this year.

The broker dubbed today's result "strong". It rates Qantas shares a buy with an $8.20 12-month price target – a potential 35% upside.

Today's tumble hasn't been enough to see the Qantas share price in the 2023 red. The stock is still up 3% year to date and 14% over the last 12 months.

For comparison, the ASX 200 has lifted 5% this year and 1% since this time last year.

The post Why is Qantas buying back shares instead of paying dividends? appeared first on The Motley Fool Australia.

In morning trade, the airline operator's shares are down almost 4% to $6.22.

Why is the Qantas share price falling?

Investors have been selling down the Qantas share price on Thursday in response to the Flying Kangaroo's half-year results release.

For the six months ended 31 December, Qantas reported a 222% increase in revenue to $9.9 billion and an underlying profit before tax of $1.43 billion. The latter compares very favourably to loss of $1.3 billion in the prior corresponding period.

In light of this strong form, its much-improved balance sheet, and positive outlook, Qantas has decided to return up to $500 million to shareholders via an on-market share buy-back.

Broker response

Goldman Sachs has taken a look at the result and has given its verdict. It notes that the company's profit was a touch short of its expectations, which may explain some of the weakness in the Qantas share price today. It commented:

QAN adjusted PBT of $1,428m was 1% below GSe and 1% ahead of consensus (this compared with guidance of $1,350-1,450m. Revenues were 3% higher than expected, offset by higher than expected ex-Fuel opex and D&A. Group capacity was 1% below our forecasts, more than offset by a 3% unit revenue beat. Adjusted Net Debt was $2,398, which was 1% below our estimates and well below the $3.9-4.8bn revised target range (struck at 2.0-2.5x EBITDA assuming a 10% ROIC and was $4.2-5.2bn in August 2022).

Another item that caught the eye of Goldman Sachs was Qantas' capex spending. It highlights that this is ramping up quicker than it was expecting. Its analysts add:

FY23 Capex $2.6-2.7bn from (previously $2.2-2.3bn; GSe $2.3bn; Consensus $2.3bn), reflecting re-phasing of existing commitments for improved commercial terms. FY24 capex of expected to be $3-3.2bn vs GSe of $2.8bn (although we note that our FY24 ND was ~$600m below the bottom of the revised target range) and consensus of $3bn.

Nevertheless, as things stand, the broker has a conviction buy rating and $8.20 price target on Qantas' shares. Though, this could change once Goldman Sachs has updated its financial model.

The post Qantas share price falls 4% despite huge profits and major share buy-back appeared first on The Motley Fool Australia.