Qantas Airways' (ASX:QAN) Project Sunrise initiative is expected to lead to a structural re-rating of the carrier's international operations, Morgan Stanley said in a note, the Australian Financial Review reported Tuesday.

Under the initiative, the company aims to operate the world's first long-haul, non-stop commercial flights from Sydney to London and New York, according to its website.

Morgan Stanley analyst Joseph Michael said that while Project Sunrise could make a potential AU$400 million contribution to earnings before interest and taxes, it also creates a bigger opportunity for the airline to tighten its valuation discount to global peers, AFR reported.

The investment firm maintained an overweight rating on Qantas while raising the price target to AU$12.50 from AU$10.60, according to the report.

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