Worley shares (ASX: WOR) were the worst performer on the ASX 200 today, as markets punished a sharp fall in FY26 earnings despite a stronger order book. The Worley share price fell 10.81% on Wednesday to close at A$9.90, pushing the share price below the psychologically important A$10 level for the second time this year.
WOR traded as low as A$9.61 intraday, marking its weakest level in five years and extending the decline to 21.12% year to date. The sell-off was driven less by revenue, which was broadly stable, and more by profitability, as margins came under pressure, and statutory earnings fell sharply.
Why Are Worley Shares Down?
Worley reported FY26 aggregated revenue of A$12,023 million, largely unchanged from the prior period, yet inderlying EBITA fell 10.8% to A$734 million, while underlying NPATA declined 16.8% to A$395 million. Statutory NPATA dropped 35.6% to A$306 million, reflecting the impact of lower earnings and significant one-off costs.
FY26 earnings were said to be affected by ongoing conflict in the Middle East, foreign currency movements and A$120 million in transformation and restructuring costs, yet with that conflict continuing, earnings could continue to come under. Regionally, revenue growth was strongest in the Americas, while Europe and the Middle East presented clearer challenges.
The balance of the result contained several stronger operational indicators. Bookings rose 23% to A$15.5 billion, while backlog increased 9% to A$13.8 billion. That suggests client demand remains healthy and that Worley has meaningful future work available, even if near-term earnings have been compressed.
Top Australian Brokers
- Pepperstone - Top Australian broker - Read our review
- eToro - Invest in ASX and international shares - Read our review
Capital management also remained supportive. Worley declared a final unfranked dividend of 25 cents per share and completed its A$500 million share buyback. The company has also spent an additional A$24 million on a new buyback, signalling that cash generation and balance-sheet flexibility remain intact despite the lower reported profit.
What Lay Ahead?
Price Targets
The central debate for Worley is whether FY26 represents a trough or the start of a longer period of margin pressure. The bearish near-term argument is straightforward: earnings fell, margins compressed, and the share price broke a major support level. After a result like this, markets often require proof before rewarding a recovery narrative.
The bull case rests on the strength of the pipeline. Bookings and backlog both moved higher, suggesting that demand has not disappeared; rather, some projects have been delayed. If delayed Middle East work begins to progress and the Americas continues to perform, Worley may be able to convert its order book into stronger revenue and earnings in FY27.
Management is guiding for mid- to high-single-digit growth in both aggregated revenue and underlying EBITA in FY27. The company expects stronger activity in the second half, particularly as delayed Middle East projects move forward. That guidance is constructive, but it now carries a higher credibility hurdle because FY26 earnings came in weaker than markets had expected.
Technically, the share price has near-term damage to repair. A$10 now becomes a resistance level to reclaim, while the A$9.61 intraday low becomes an important reference point. If the stock stabilises and future updates show improving margins, the current valuation may begin to reflect a more attractive risk-reward balance. If delays persist or margins remain weak, further downside pressure cannot be ruled out.
Bull Case:
- Bookings rose 23% to A$15.5b, while backlog increased.
- FY27 guidance points to revenue and underlying earnings recovery.
- Completed buyback and dividend support cash-generation confidence.
Bear Case:
- Underlying EBITA fell 10.8%, and statutory profit dropped sharply.
- Middle East delays and foreign exchange cloud near-term conversion.
- Guidance credibility needs proof after FY26 margin disappointment.
