Qantas shares were just downgraded but I still rate them as a buy

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I think the downgrade was wrong and see value in the airline's shares. The post Qantas shares were just downgraded but I still rate them as a buy appeared first on The Motley Fool…

Morgans might already be regretting its decision to downgrade Qantas Airways Ltd (ASX: QAN) shares this week.

Shortly after the broker lowered its recommendation and price target, the airline announced plans to cut approximately 850 corporate jobs as part of a major technology overhaul.

Investors welcomed the news, sending Qantas shares 6.3% higher on Tuesday to finish at $9.90.

According to its note, Morgans downgraded Qantas shares from accumulate to hold and reduced its price target from $10.60 to $9.60.

The downgrade followed Qantas' latest trading update, which revealed that its first-half FY 2027 fuel bill is now expected to reach approximately $3.75 billion, up from its previous forecast of $3.6 billion. The broker explained:

On Tuesday, Qantas revealed further efforts to improve operating efficiency.

The Flying Kangaroo has entered into a partnership with Accenture (NYSE: ACN) to modernise its technology systems and increase its use of artificial intelligence.

The changes will affect approximately 850 corporate roles over the coming years, with some functions moving to Accenture teams in Australia and India.

Although the scale of the potential savings hasn't been disclosed, it seems apparent that the initiative could help Qantas simplify its operations and reduce costs over time.

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