Web Travel Group tumbled 30% last week. Here's why brokers are backing up the truck
Web Travel shares plunged 29.5% on Spanish tax audit fears, but analysts say the impact is likely immaterial with FY26 guidance reaffirmed.
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Mentioned
KEY POINTS
- Web Travel Group shares fell 29.5% last Friday after announcing a Spanish tax audit, triggering Corporate Travel comparison fears, but the audit only affects the Spanish subsidiary which represents a minor portion of the business.
- Major brokers including JPMorgan, Jarden and Ord Minnett all maintained buy-equivalent ratings, viewing the financial impact as likely immaterial, particularly given the company reaffirmed FY26 guidance immediately after the announcement.
- UBS analysis suggests the Spanish entity generated cumulative revenue of approximately A$130 million over 3.5 years, making even a full tax liability relatively immaterial compared to the $400 million in market cap lost.
Web Travel Group (ASX: WEB) suffered a 29.5% selloff last Friday, after a Spanish tax audit announcement likely echoed investor fears of a Corporate Travel-style nightmare.
For context, Corporate Travel (ASX: CTD) shares have been suspended since August as investigations revealed substantial irregularities in the UK and Europe operations, including incorrect revenue recognition and overcharging clients.
While the mention of 'audit' may be concerning – there are plenty of reasons to believe that the selloff was an overreaction.
Spain at a glance
WEB states that the "taxpayer being audited is the Spanish subsidiary only", though the company has never reported Spain as a standalone region. The company owns two Spain-based subsidiaries (Busy Bee SL and Sunhotels Mundo) compared to the ~10 subsidiaries it owns in Europe and the UK.
In WEB's first-half FY26 results presentation, the company said it is evolving towards equal total transaction volume share from its top three regions (Americas, Europe and APAC).
What analysts are saying
Most analysts believed the potential financial impact was likely immaterial, especially since the announcement was soon accompanied by a trading update which reaffirmed FY26 guidance. This presentation also noted some early insights in FY27, including double digit bookings growth and stable TTV margins
While uncertainty remains, brokers generally assessed the likely scope as minor, with comparisons to peers suggesting a small revenue contribution from Spain.
Here are some of the key takeaways from major brokers:
JPMorgan maintained Overweight, target $6.00 unchanged, viewing the audit as uncertain but limited in detail, with FY26 guidance reaffirmation supporting confidence in continued TTV growth despite margin pressure and an undemanding valuation.
Jarden maintained Overweight, lowered target from $5.90 to $5.70, seeing the audit as immaterial based on available data, with trading tracking medium-term targets and ongoing confidence in margin expansion driven by strong conversion and AI tools.
Ord Minnett maintained Buy, lowered target from $7.00 to $6.16, emphasising the audit is unlikely to impact group earnings, highlighting resilience in FY26 EBITDA guidance and a positive outlook for FY27 growth and market share gains.
UBS says WEB undergoes tax reviews and audits regularly, with three separate tax audits since the second half of 2025. Their analysis of Sunhotels suggests cumulative revenue of ~€80 million (~A$130m) over the 3.5 year period of investigation.
"We think this entity probably contains revenue derived outside of Spain, but even applying 21% tax to the entire amount is a relatively immaterial amount ... especially against the backdrop of >$400m of market cap lost on Friday."
