Web Travel Group (ASX:WEB) fiscal year 2026 results beat consensus, but the early read on fiscal year 2027 trading is weak, with the first eight weeks expected to drive downgrades, mostly due to the conflict in the Middle East, Jefferies said in a Wednesday note.

The company recently reported fiscal year 2026 underlying earnings of AU$0.238 per share, up from AU$0.205 a year earlier.

Revenue for the 12 months ended March 31 was AU$394.1 million, compared with AU$328.4 million a year earlier.

The Middle East conflict is weighing on total transaction value as high cancellation rates and shorter stays have severely impacted the region.

With limited near-term visibility, the company omitted its previously provided fiscal year 2027 50% earnings before interest, taxes, depreciation, and amortization margin target, the financial services said.

Jefferies is expecting the company to recover heading into the second half of fiscal year 2027 as disruption fades and travel demand normalizes, but conviction remains low due to near-term demand volatility.

Jefferies maintained a hold rating on Web Travel Group and lowered its price target to AU$2.70 from AU$3.10.