ASX 200 stock Ebos Group Ltd (ASX: EBO) is in focus today after the company adjusted its FY26 earnings outlook yesterday.
On Wednesday, the company released an announcement to the ASX, addressing the impact of elevated fuel costs on FY26 earnings outlook.
It has been a tough start to the year for the pharmaceutical wholesaler and distributor.
The ASX 200 stock has fallen by 26% year to date.
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What did the company report?
In yesterday's announcement, the company acknowledged fuel prices have increased materially in recent months, driven by global supply dislocation and heightened geopolitical risks.
In addition, there is a lesser impact on the price of hydrocarbon related consumable products, for example plastic wrapping and polystyrene foam.
This has resulted in higher direct transport, consumables and logistics costs across the Group's operations, particularly within our distribution intensive businesses. While underlying demand across the Group remains stable, the pace and extent of fuel and consumables cost increases during the second half of FY26 have exceeded the Group's previous assumptions.
Management also said it now expects FY26 underlying EBITDA of approximately $610–$620 million, compared with prior guidance of $615–$635 million.
This reflects additional costs of $5-10 million, absorbed by the Group in maintaining service continuity, as opposed to a change in underlying demand or the long-term earnings profile of the Group.
The business remains committed to reliable healthcare delivery in Australia and New Zealand, focusing on service continuity while handling current cost pressures.
Morgan's updated view
Following this release, the team at Morgans updated its outlook for this ASX 200 stock.
The broker said it has moved its target price to A$22.92 (from A$28.07) taking a cautious view of the near term.
We see growth returning in FY28, in the meantime the yield is attractive at ~6%. Despite the share price weakness there is significant upside to our target price and we maintain a BUY recommendation. We note the Investor Day next week may restore some investor confidence.
Upside remains for this ASX 200 stock
From today's share price hovering around $17.38, there is still plenty of upside for Ebos Group shares.
Based on Morgan's updated target of $22.92, this still indicates an upside potential of approximately 32%.
Elsewhere, 11 analysts forecasts via TradingView have an average one year price target of $26.57 on this ASX 200 stock.
This indicates an upside potential of more than 52%.
