June 20, 2024
Top 10 Stock Qantas Airways Sell 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 June 20, 2024 in the market index ASX 50 because of its high performance in at least one of the Obermatt investment strategies. Only the Obermatt Value Rank exhibits above-average performance, which means that the stock is seen as critical by the professional community and other financial facts are below average, conveying mixed investment signals. Based on the Obermatt 360° View of 6 (6% performer), Obermatt issues an overall sell recommendation for Qantas Airways on June 20, 2024.
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 Sell
| 360 METRICS | June 20, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 56 |
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| GROWTH | ||||||||
| GROWTH | 23 |
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| SAFETY | ||||||||
| SAFETY | 11 |
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| SENTIMENT | ||||||||
| SENTIMENT | 34 |
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| 360° VIEW | ||||||||
| 360° VIEW | 6 |
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ANALYSIS: With an Obermatt 360° View of 6 (better than 6% compared with alternatives), overall professional sentiment and financial characteristics for the stock Qantas Airways are critical, mostly below average. The 360° View is based on consolidating four consolidated indicators, with three out of four indicators below average for Qantas Airways. Only the consolidated Value Rank has an attractive rank of 56, 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 56% of alternative stocks in the same industry. All other consolidated ranks are below average. The consolidated Growth Rank has a low rank of 23, which means that the company exhibits below-average growth momentum when looking at financial metrics such as revenue, profit, and invested capital growth as well as stock returns. The consolidated Safety Rank has a riskier rank of 11, meaning the company has a riskier financing structure than 89% comparable companies when looking at the amount of its debt, its refinancing requirements, and its ability to service debt. Finally, professionals are more pessimistic about the stock than for 66% of alternative investment opportunities, reflected in the consolidated Sentiment Rank of 34. ...read more
RECOMMENDATION: With a consolidated 360° View of 6, Qantas Airways is worse than 94% of all alternative stock investment opportunities based on the Obermatt Method. This means that Qantas Airways shares are on the riskier side for investors. Only one of the consolidated Obermatt Ranks exhibits above-average performance, namely the Value Rank at a level of 56. All other ranks are below average, so proceed with caution. The company has below-average growth expectations (Growth Rank of 23), a riskier financing structure than the competition (Safety Rank of 11), and the market sentiment in the professional investor community ranking at (Sentiment Rank of 34) is negative. This combination is sensitive to a crisis, because high debt levels (low safety) require growth to finance the debt burden. It’s no wonder that the investor community indicators are skeptical (low 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. We recommend evaluating whether the future of Qantas Airways is as challenging as the low price of the stock suggests. Since the professional community is pessimistic, you might need to worry about the future of Qantas Airways. Only invest if you have solid reasons to believe that the low growth is temporary and the current market sentiment is an overreaction, possibly due to reputational issues in the past. ...read more
Sentiment Strategy: Professional Market Sentiment for Qantas Airways only reserved
ANALYSIS: With an Obermatt Sentiment Rank of 34 (better than 34% compared with alternatives), overall professional sentiment and engagement for the stock Qantas Airways is below industry average. The Sentiment Rank is based on consolidating four sentiment indicators, with half of the metrics below and half 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 and has a rank of 50 which means that currently, stock research experts are getting even more optimistic about investments in Qantas Airways. But Market Pulse has a low rank of 19, which means that the current professional news and professional social networks are on the negative side when discussing this company (more negative news than for 81% of competitors). This is an essential sign of caution, as it could be the forebearer of bad news. Professional Investors are also somewhat absent with a rank of 30, which means that, currently, professional investors hold less stock in this company than in 70% of alternative investment opportunities. Pros tend to invest in other companies. This is expected if the company is of a smaller size (medium or smaller). ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 34 (less encouraging than 66% compared with investment alternatives), Qantas Airways has a reputation among professional investors that is below that of its competitors. While the general news feeds in the professional market are negative, the analyst recommendations are optimistic about the company, and even increase their ratings despite the negative news. This is an ambiguous situation with positive and negative signals from the professional side. Investors should be on the lookout for negative news but not worry too much about it as long as the overall news is still positive. ...read more
Value Strategy: Qantas Airways Stock Price Value better than average
ANALYSIS: With an Obermatt Value Rank of 56 (better than 56% 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 90, which means that the stock price compared with what market professionals expect for future sales is lower than for 90% 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 41 (dividends are expected to be higher than for 41% 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 56, 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 negative
ANALYSIS: With an Obermatt Growth Rank of 23 (better than 23% 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, with half of the indicators below and half above average for Qantas Airways. Sales Growth has a rank of 56 which means that currently, professionals expect the company to grow more than 56% of its competitors. Capital Growth is also above 11% of competitors with a rank of 70. But Profit Growth only has a rank of 11, which means that currently professionals expect the company to grow its profits less than 89% of its competitors. And Stock Returns have also been below average with a rank of only 34. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 23, is a sell recommendation for growth and momentum investors. Profits are sometimes low if the company invests in the future. The positive revenue and capital investment outlook confirms such an interpretation. Both revenues and capital are solid growth indicators, and lower profits in such a case would be encouraging. But the investors see it differently by punishing the share price. Sometimes, Mister Market is not very reliable, because it is not uncommon for it to be volatile. Investors should look out for signs of growth expenditure that could justify low profit growth, and they may also find reasons why recent stock price developments don't confirm the growth outlook of operations. While operating growth indicators are not perfect, they are more reliable indicators for future performance than stock prices that can repeatedly surprise investors. ...read more
Safety Strategy: Qantas Airways Debt Financing Safety risky
| SAFETY METRICS | June 20, 2024 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 1 |
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| REFINANCING | ||||||||
| REFINANCING | 3 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 72 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 11 |
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ANALYSIS: With an Obermatt Safety Rank of 11 (better than 11% 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 72, meaning the company generates more profit to service its debt than 72% 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 11 (worse than 89% 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 | June 20, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 56 |
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| GROWTH | ||||||||
| GROWTH | 23 |
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| SAFETY | ||||||||
| SAFETY | 72 |
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| COMBINED | ||||||||
| COMBINED | 12 |
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ANALYSIS: With an Obermatt Combined Rank of 12 (worse than 88% 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 56 (better than 56% of alternatives) but show below-average growth (Growth Rank of 23), and are riskily financed (Safety Rank of 11), which means above-average debt burdens. ...read more
RECOMMENDATION: A Combined Rank of 12, 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 56) but low growth (Obermatt Growth Rank of 23) and risky financing practices (Obermatt Safety Rank of 11), it may be a risky investment, because debt in times of crises can make things worse. The good value, better than 56% 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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