Has the Qantas share price flown too close to the sun?

The Qantas Airways Ltd (ASX: QAN) share price is gaining altitude today.

Shares in the S&P/ASX 200 Index (ASX: XJO) airline closed yesterday trading for $9.65. In late morning trade on Thursday, shares are changing hands for $9.83 apiece, up 1.9%.

For some context, the ASX 200 is up 0.7% at this same time.

Up 10.8% since this time last year, and trading on a 5.4% fully franked trailing dividend yield, the Flying Kangaroo has handily outpaced the 3.4% one-year gains posted by the benchmark index.

And while shares have retraced from their all-time closing high of $12.12 on 28 August, they remain up 22.7% from their recent 9 April lows. And some analysts believe the Qantas share price, like the Greek legend Icarus, may have flown too close to the sun.

Sanlam Private Wealth's Ben Faulkner, for example, cautions that the ASX 200 airline stock could be in for some turbulence (courtesy of The Bull).

Is the Qantas share price in danger of overheating?

"The share price has run ahead of fundamentals, making it vulnerable to any possible downgrades, in our view," said Faulkner, who has a sell recommendation on the stock.

Citing potential headwinds for the Qantas share price, he said, "We believe the outlook for earnings growth is modest compared to the recent past."

Then there's the airline's sizeable capital expenditures. In FY 2025, the company reported capital expenditure of $3.9 billion, up 22% from the prior year.

"Fleet renewal plans and sustainability investments require substantial capital, which could potentially mute shareholder returns moving forward," Faulkner said.

In FY 2025, Qantas had 17 new aircraft delivered, with the company reporting in August that it had placed orders for 20 additional A321XLR aircraft.

Faulkner concluded that with the Qantas share price having risen from $8.02 on April 9 to trade at $9.74 on December 4, "investors may want to consider cashing in some gains".

What's the latest from the ASX 200 travel share?

Qantas reported its FY 2025 results on 28 August.

Highlights included an 8.6% year-on-year increase in revenue and other income, which reached $23.82 billion. And despite the increased capex, underlying profit before tax of $2.39 billion was up 15% from the prior year. Statutory profit after tax increased by 28% to $1.61 billion.

With profits up, management declared a final Qantas dividend payout of 26.4 cents per share, fully franked.

Investors were clearly pleased with the results, with the Qantas share price closing up 9.1% on the day.

The post Has the Qantas share price flown too close to the sun? appeared first on The Motley Fool Australia.

Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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