Qantas Airways Ltd: Analysis and Valuation

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TABLE OF CONTENTS TOPICS PAGE NO. 1.0 Executive Summary………………………………………………………3-4 2.0 Objectives…………………………………………………………………..5 3.0 Economic Analysis………………………………………………………..6-7 4.0 Industry Analysis…………………………………………………………..8-10 5.0 Company Profile..………………………………………………………….11 5.1 Key Financial Ratios………………………………………………11-12 6.0 Valuations………..…………………………………………………………15 6.1 Dividend Valuation Model…………………………………………14-16 6.2 Price-Earnings(P/E) Model.………………………………………..17 7.0 Limitations……………………………………………………………………18 8.0 Conclusions and Recommendations……………………………………...19 5.0 List of References……………………………………………………………20-22 APPENDIX 1 Qantas Airways Ltd – Key Facts…….………………………………….23-24 2 Ratio…show more content…
The report will serve as a guide to a potential investor who wants to make an investment in the said company. Therefore, the report also gives a recommendation about whether or not to invest in the company. Moreover, this report has been prepared to fulfil the passing criteria of HBC618 Personal Investment. 3.0 ECONOMIC ANALYSIS The world economies depend on one another immensely as they are connected through trade, migration and investment. Presently, global economy has slowed down as a result of the credit market turmoil and tightening of financial conditions in the developed countries especially in US. On the other hand this has not affected the economic growth in Asian countries such as India and China which still has been strong. This has been one of the major factors for Australian economy to be in a strong position, as China and India are one of the biggest consumers of Australian exports. In the year 2008 Australia has seen an increase in its cash rate (also known as Interest rate) twice by 25 basis points. At present the cash rate is 7.25 percent. One of the major reasons for such a tightening of monetary policy is the rising inflation in Australia. Presently Australia is experiencing an inflation rate of 4.2 (Figure 1) percent which is above the Reserve Bank target of 2 to 3 percent. In addition to this, Australian dollar is strengthening against many currencies
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