Merrill Lynch has downgraded its rating on Qantas from "neutral" to "sell" on the view that the airline could face earnings headwinds next financial year.
However, two other brokers have maintained "buy" ratings on the stock.
Merrill Lynch kept its fiscal 2008 forecast unchanged, saying it still expectsthe national carrier to beat its current guidance of 40 per cent earnings growth.
Merrill expects Qantas' earnings to decline in fiscal 2009.
Merrill analysts Kevin O'Connor and Nicholas Robison said Qantas faced rising competition, with new airlines entering its domestic and international markets expected to put ticket prices under downwards pressure.
Citigroup, which kept its "buy" rating, said domestic demand, growth in Jetstar International and potential restructuring options were expected to provide scope for growth.
Goldman Sachs JBWere also has a "buy" rating on the stock.
