3 things I learned from the market today – Wednesday, 28 May

'Things I Learned from the Market Today' is a daily series sharing insights from my coverage of Market Index's Live Blog.

Don't underestimate a guidance miss

Fisher & Paykel (ASX: FPH) reported a relatively in-line FY25 result but its FY26 guidance fell short of market expectations.

Here are the key numbers for FY25:

• Operating revenue up 16% to $2.02bn, in-line with UBS estimates

• Gross margin up 296 bps to 62.9%, in-line with UBS estimates

• Profit after tax up 184% to $377.2m vs. $373m ests (1.1% beat)

• Full-year dividend up 2% to 42.5 cps vs. 55 cps ests (22% miss)

And the softer-than-expected FY26 guidance:

• NPAT between $390-440m vs. $460m ests (10% miss at midpoint)

• Revenue between NZ$2.15-2.25bn vs. $2.34bn ests (6% miss at midpoint)

This mixed result saw Fisher & Paykel shares open 0.5% lower but the stock spent most of the session trending lower to a -4.7% close. It wouldn't be surprising to see the stock face consensus downgrades tomorrow, though most analysts will likely remain buy-rated given its longer-term margin targets and still-solid growth trajectory.

Fisher & Paykel intraday chart, Wednesday 28 May 2025 (Source: TradingView)

Upgrading while peers are downgrading

Web Travel Group (ASX: WEB) a relatively positive FY25 result, broadly ahead of consensus expectations." “Our significant TTV growth continued unabated during the year. At almost $5 billion, TTV is nearly double what it was before the pandemic, with our key growth markets of Asia-Pacific and the Americas now accounting for 53% of TTV, up from 31% pre pandemic," said Managing Director John Guscic.

• Total transaction volume up 22% to $4.86bn vs. $4.98bn ests (2.4% miss)

• TTV margins stabilised at 6.7% (FY24: 8.2%) vs. 6.48% ests (22 bp beat vs. Morgan Stanley estimates)

• Revenue up 1% to $328.4m vs. $325.3m ests (0.9% beat)

• Underlying EBITDA down 13% to $120.6m vs. $118.9m ests (1.5% beat)

• Underlying net profit after tax down 22% to $79.2m vs. $78.8m ests (0.5% beat)

Year-to-date through May 26, Web disclosed the following metric

• Bookings up 29% year-on-year

• Total transaction volumes (AUD) up 37% year-on-year

• Total transaction volumes (EU) up 28% year-on-year

• Targeting record EBITDA in FY26 and margins between 44-47%

RBC Capital Markets analyst Wei Weng-Chen estimates the above trading update implies a significant beat against market expectations.

"All said, this update will likely result in double-digit upgrades to consensus EBITDA expectations. With most global travel companies in downgrade mode, WEB have bucked the trend and upgraded quite materially," says Chen.

Web shares finished the session 12.3% higher, closing at the highest level since 14 October 2024. It'll be interesting to see the magnitude of upgrades it receives tomorrow.

Sometimes it's all priced in

Eagers Automotive (ASX: APE) issued a trading update at its Annual General Meeting. For a stock that's up almost 50% year-to-date, the updates were unsurprisingly positive.

• "The order write remains solid (materially up on 2024 on a like-for-like basis) which represents a resilient consumer and the benefits of our unique partner portfolio."

• "Our unique businesses in our Retail Joint Venture and easyauto123 are trading at record levels and we continue to execute on our structural productivity improvements."

• Remains on track to achieve 2025 revenue growth target of more than $1 billion (this is mostly backed into analyst expectations)

• "We continue to believe the second half will benefit from tailwinds associated with improving industry conditions, interest rate relief, and without some of the other disruptions experienced in the first half."

Eagers experienced a volatile session, with notable price points including:

• Open: -2.0%

• Session low: -3.7%

• Session high: +1.5%

• Close: -1.8%

The mixed market reaction suggests the update, while positive, prompted both profit-taking by sellers and momentum-driven buyers.