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SYDNEY: Qantas Airways has received a broker downgrade to "neutral" from "buy" on the view that its proposed restructure could disappoint some investors, and fuel costs could rise higher than expected.
Two other brokers, however, have maintained "buy" and "overweight" ratings on the stock.
Earlier this year, Qantas said it was considering future ownership structures for its so-called non-flying businesses, which include its freight fleet and frequent flyer units.
Merrill Lynch, which downgraded the stock, said the timing and value creation of the restructure could fall short of some investors' expectations.
Qantas said a delay in the delivery of new Boeing 787 Dreamliner aircraft would not materially affect its operations and that there was no reason to change its earnings forecasts. But the airline left open the possibility of seeking compensation from Boeing.
"The plan to move the fleet into a separate vehicle has been delayed," Merrill analysts Kevin O'Connor and Olivia Burgess said. "And since announcing the broad details of the restructuring plans back in May, Qantas has said that it will retain majority control and/or ownership of any divisions that it partially sells down."
Singapore Airlines also partially sold down its main two subsidiaries in 2001 and currently trades at a 22 per cent discount to Qantas, the analysts said.
Goldman Sachs, which kept its "buy" rating on the stock, expects Qantas to offset the aircraft delivery delays by reallocating network capacity and seeking compensation from Boeing.
- AAP
