Worley Ltd (ASX: WOR) shares have been making headlines today after the company flagged a $30–40 million EBITA hit for FY26 from Middle East disruptions.
As reported this morning, the company released updated FY26 guidance, taking into consideration ongoing conflict in the Middle East.
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What did Worley report?
- No project cancellations in the Middle East so far; projects continue with some delays
- Estimated adverse impact of $30–40 million on FY26 underlying EBITA from Middle East conflict
- Underlying EBITA margin (excluding procurement) still expected at 9.0–9.5% for FY26
- Aggregated revenue growth in FY26 still targeted above FY25
- Delays to commencement and awards of new projects in the Middle East region
Management said the extended duration of the conflict and continued uncertainty is resulting in further delays to existing Middle East-related projects and the commencement and award of new projects in the region.
In relation to our previously disclosed FY26 Group outlook it is now unlikely Worley will achieve growth in underlying EBITA in FY26.
However, we continue to expect the underlying EBITA margin (excluding procurement) to be within a range of 9.0-9.5% and we continue to target higher growth in aggregated revenue than FY25.
Initially, this morning, the announcement led to a 3.5% drop for Worley shares.
However since then, the price has recovered and now sits more than 3% higher during Tuesday's trade.
What did Morgans have to say?
Following the announcement, the team at Morgans provided updated guidance on the ASX 20 stock.
The broker said Worley has indicated that it is now "unlikely" to achieve its prior guidance for EBITA growth in FY26.
This comes following a softer-than-expected 1H26 segment result. Looking ahead, WOR should see some medium-term support from Middle East repair activity and a broader uplift in global upstream hydrocarbon spending driven by renewed energy security concerns.
However, consensus already embeds strong growth into FY27, and risks persist, including project concentration risk associated with larger EPC work, and a structural shift in upstream hydrocarbon capex toward subsea and shale where WOR is underweight.
As a result, the broker reduced EBITA forecasts by ~5% across the forecast period.
Morgans lowers price target
In a note out of Morgans today, the broker also said it has lowered its target price for Worley shares to $11.60.
It was previously $12.20.
From today's stock price hovering around $11.46, the updated target indicates the ASX 200 shares are now trading close to fair value.
