Qantas shares have fallen after investment bank JP Morgan warned that the airline faces persistent weak domestic air travel and challenging international conditions.
The carrier's shares were down 6.48 per cent, or 38 cents, at $5.64 at 1400 AEST, after having rallied to $6.02 on Friday - their highest level in almost 10 years - following a strong full-year result.
But on Monday, Qantas stocks began to fall after a JP Morgan report cautioned that the share price was too high.
"To justify the current share price ($6.02), we estimate further domestic fare increases in the order of 10 per cent (holding into perpetuity) are needed," the report by analysts Guy Bunce and Peiting Liang said.
They said that since July 2016, Qantas had outperformed the broader market significantly and investors should capitalise on the gains.
"Given the persistent headwinds from a weak domestic air travel market and challenging international conditions, we recommend investors take profit."
Qantas on Monday announced a major reshuffle of its senior executives in its low cost carrier Jetstar and in its international division.
Jetstar CEO Jayne Hrdlicka will become CEO of Qantas' loyalty and digital ventures division, while current international and freight boss Gareth Evans will take over at Jetstar, in changes effective from November.
Freight, catering and airports division manager Alison Webster will become CEO of international, while freight will come under the management of domestic business CEO Andrew David.
Qantas delivered its second highest underlying annual profit in its 97-year history on Friday of $1.4 billion and announced a $373 million buyback to increase shareholder returns.
The results came a year after the carrier delivered a record $1.5 billion underlying profit and marked the completion of the airline's $2 billion turnaround that began in 2014 and included 5,000 job cuts, major fleet changes and new routes.
