2026 has gone from bad to worse for Webjet Group (ASX: WJL) shares.
Last week, Webjet shares tumbled another 10%, taking its year to date drop to almost 50%.
It's been tough sledding for ASX travel shares this year.
Sentiment has been negatively affected by global conflict, rising interest rates and cost of living pressures.
As many investors are aware, Webjet provides online travel agency services. Its brands include Webjet OTA, Airport Rentals, Motorhome Republic, and Trip Ninja.
Image source: Getty Images
Why are investors exiting positions in Webjet shares?
Webjet shares endured a 10% fall last week largely on the back of its FY26 result.
The company reported:
- A 1% increase in revenue to $136.4 million, while statutory net profit after tax (NPAT) increased 85% to $3.7 million.
- Underlying EBITDA fell 20% to $28.1 million, and underlying NPAT dropped 24% to $13.6 million.
- Bookings fell 7% to 1.4 million, while total transaction value declined 3% to $1.46 billion.
Perhaps the biggest disappointment of all was Webjet's update on its agreement with Virgin Australia.
Webjet said Virgin Australia will significantly reduce commission payments and commercial arrangements from July 2026, which would have cut FY26 revenue by about $3 million if applied for the full year.
While the financial impact is relatively modest, investors may see it as another challenge for Webjet as it faces softer travel demand, airfare pressure, weak consumer confidence, and a tougher FY27 outlook.
What are experts saying?
Following the result, brokers downgraded their views on Webjet shares.
Morgans said the FY26 result was weak but in line with guidance.
It pointed out that FY26 was impacted by subdued trading conditions and material investment in the business.
FY27 is going to be a particularly challenging year for WJL given the Middle East conflict, cost of living pressures, Virgin Australia materially reducing its commission and overrides and the RBA surcharging regulation changes.
We have made significant revisions to our already well below consensus forecasts. In the absence of corporate activity, shareholders will need to be patient given the current challenges WJL needs to overcome while investing in its business for longer term success. We retain a Hold rating with a new price target of A$0.40.
Similarly, Jefferies cut its price target on Webjet shares by 38% to 40 cents per share.
After closing last week at 45 cents per share, it appears brokers expect more downside for Webjet shares in the short term.
