Negative impacts on Worley (ASX:WOR) due to disruptions in the Middle East are expected to spill into fiscal 2027, Jefferies said in a Thursday note.
The company initially thought the hit would be around AU$30 million to AU$40 million. It has now reported that the impact will be closer to AU$60 million for fiscal 2026.
The company disclosed a further AU$25 million hit, with Jefferies expecting an additional three-month drag, triggering a further AU$50 million impact in fiscal 2027.
Most of the company's core business segments show weak lead indicators, including North American project delays, reduced sustainability-led work tax incentives, and weak chemical demand, Jefferies said.
However, the resources sector remains a bright spot, and a strong balance sheet allows the company to complete its AU$300 million share buyback program.
Jefferies reaffirmed its hold rating on Worley and lowered its price target to AU$10.61 from AU$11.48.
Worley shares fell nearly 3% in midday trade Friday.