Qantas soars up the charts

Qantas, the biggest ASX-listed company to make the top 100 using total shareholder returns as the yardstick, was also the biggest surprise, with the airline delivering an eye-catching one-year return for investors of 151 per cent.

That impressive result came solely from the airline’s rising share price rather than through dividend payments, which went missing during Qantas’s turbulent years of falling passenger numbers, rising costs and heavy losses.

Most of the bad news appears to have been absorbed by investors, who have lifted the airline’s share price rise over the past 12 months from a low of $1.19 to recent sales at $3.39, with that upward trend earning Qantas a fistful of buy recommendations from investment banks.

The consensus view of seven banks, including UBS, Citi and Morgan Stanley, is that the Qantas share price is heading for $4.28.

The roots of that optimistic outlook can be traced to the airline’s TSR performance over time with the five-year return a modest 8 per cent, rising to a three-year score of 43 per cent and then up to the latest 12-month score of 151 per cent – a trend that demonstrates how the airline has been picking up speed as a financial performer.

Whether the good news can keep flowing for Qantas is the question for investors to consider; but as an early guide, the $4.28 share price tip constructed from investment bank forecasts indicates that there is already a 26 per cent TSR uplift in waiting.

Next year’s result could be even better if Qantas makes a return to paying dividends, something a number of banks (but not all) expect to happen soon.