In Brief: Webjet, Myer & Goodman Group

This story features WEB TRAVEL GROUP LIMITED, and other companies. For more info SHARE ANALYSIS: WEB

The company is included in ASX200, ASX300 and ALL-ORDS

This week’s InBrief focuses on turnaround situations and highlights companies investing and positioning for medium term growth.

-Webjet flies above expectations
-Myer looking to enhance and improve customer experience (and spending)
-No upgrade from Goodman

By Danielle Ecuyer

Quote of the week comes from economists at Citi:

“With the April data missing key services prices, the RBA won’t rush to a conclusion on the likely outcome for Q2. That said, the ABS’s YoY indicator is range bound at a comfortable 2.4%, which gives time to assess the domestic labour market and global developments ahead of the next RBA Board meeting.”

Webjet Group, bears be gone

Webjet Group ((WEB)) pulled the proverbial rabbit out of the hat with its FY25 investor briefing.

Canaccord Genuity explained the size of the better-than-forecast FY25 underlying earnings (EBITDA) was less significant than the confidence and relief investors could feel around the revenue margin, which was sustained above 6.5%.

Although management had indicated the margin would stabilise, there were nevertheless concerns, probably heightened by other travel-related companies reporting underwhelming earnings and margin pressures.

Wilsons described the FY25 result as a “standout” in the ASX travel sector alongside the positive trading update. For the first eight weeks of 1H26, bookings and total transaction values are up 29% and 28%, respectively, on a year earlier.

More surprising are US-inbound source regions rising between 23%-58%, excluding the EU, up 7%.

Canaccord notes some softness in certain markets, but importantly, total transaction values are generated via market share rather than market growth. The analyst explains the return of operating leverage for the group will enhance share growth and be more apparent in FY26 and into FY27.

Jarden believes Webjet is benefiting from AI-powered tools for inventory, which is giving the broker increased conviction around share gains and growth in total transaction values.

Wilsons points to the only blemish as the flagged reduction in FY26 earnings (EBITDA) margin for WebBeds to 44%-47% from 50% previously, which can be accounted for by investment in sales and contracting staff to increase exposure to higher-margin contracted hotels.

Management confirmed a return to circa 50% WebBeds earnings (EBITDA) margins in FY27 and a total transaction value target of $10bn by FY30 at a 50% margin.

Jarden observed the company is seeking new opportunities to grow scale through improved connectivity with customers.

Jarden, Wilsons, and Canaccord Genuity all expressed increased confidence in the group’s position and outlook.

Wilsons upgraded its target price by 11% to $6.39 while retaining a Buy-equivalent rating, stressing Webjet is the most “resilient” of the ASX travel stocks in the current uncertain macro environment. These results are seen as reflective of management’s ability to deliver on its growth targets.

While acknowledging the positive share price response to the results, Canaccord believes there is additional upside as operating leverage emerges alongside expected growth in total transaction values. The stock offers re-rating potential in terms of the valuation ascribed. Target price was lifted 6% to $6.70 with an unchanged Buy rating.

Jarden is also Buy-equivalent rated with a more conservative target price of $5.40, down from $5.60 due to tweaking of its valuation modeling against earnings upgrades. This analyst also believes there is scope for the stock to re-rate closer to a platform multiple if it can achieve higher return on invested capital and a large total addressable market.

Goldman Sachs re-iterated growing confidence in medium-term revenue margins of around 6.5% due to the investment in contracting. Target price set at $7.10 with a Buy rating.

Optimising the retail engine

Myer Holdings ((MYR)) outlined a detailed strategy to reset the business and underpin growth. The company is aiming to better the customer experience, in turn translating into more spending.

Management highlighted a three-to-five-year transformation plan across customer and loyalty, products and brands, development of an omni-channel network, and improving sourcing and supply chain, as described by Petra Capital.

A key focus will be on retaining a robust financial structure with the balance sheet including “prudent” capital management and targeting return on investment.

Over $30m in merger synergies are expected to be realised over the short-to-medium term.

Canaccord Genuity points to targeted improvements for the store experience such as “Just Jeans store of the future”; “Apparel curated worlds”, which are designed to form clear shopping destinations and meaningful experiences for different demographics.

The broker interpreted the strategy as lifting productivity as opposed to reducing the Myer network.

As well as a number of targets including the Myer One model, which is due to relaunch in October 2025, programs and partnerships are to be extended for members to engage with Myer One loyalty programs.

The company is also seeking to launch the Myer Shoppable App, with the first phase in Aug/Sept, with a Marketplace offering to assist with inventory management for the retailer.

In terms of the property portfolio, Canaccord explains Myer has a greater store footprint versus Apparel brands and there is believed to be optionality to rationalise leases and spaces.

Importantly, Myer’s brand health is highlighted as in good shape. Canaccord retains a Buy rating alongside an unchanged target price of $1.05.

Petra Capital does envisage execution for management as a potential risk, but the strategic update helped underscore the potential upside for Myer, as well as the “strengthened” leadership team. Buy rated with a 72c target price.

Goodman Group on track or not?

Goodman Group ((GMG)) is drawing scrutiny from investors for failing to upgrade FY25 guidance, with management sticking with 9% growth in operating EPS, potentially the lowest level of growth in years, points out Jarden.

The broker is quick to dismiss concerns, emphasising 9% is still 9%, and the group is in a good position to deliver on growth from FY26 onwards with the start of around $10bn in data centre projects.

The lack of announcements on capital partners across both logistics and data centres was a point of contention for the sceptics, with management alluding to heightened macro uncertainty underpinning more conservative decisions from potential customers.

Jarden highlights the ramp-up of the data centre strategy, with Goodman adding work in progress of $1.3bn of developments at a yield to cost over 10%. The analyst anticipates sizeable upside as the balance 80% of the $10bn in the data centre pipeline is commenced.

Logistics is also not a “has-been” thematic, and the residential conversion narrative is back. Management highlighted around 30% of work in progress to remain as logistics, with some potential for conversion of specific sites to residential.

Compared to a data centre pipeline of $50-$100bn, residential conversion is less material but could result in upside to net asset valuations.

Although Jarden tweaks EPS estimates slightly lower post the 3Q25 update, the forecast compound average earnings growth rate of 12%-14% per annum from FY25-FY30 remains in place. Buy rated with a $39 target price.

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