IDP Education was travelling along fine at the beginning of the year before the wheels fell off in March, a trading update revealed. This has prompted a $240m capital raising and debt refinancing. Morgans has cut earnings per share forecast by over -40% and does not expect a full recovery until FY22.
The broker notes, nonetheless, the nature of IDP’s business means it may recover faster than expected, and a strengthened balance sheet will make the company better positioned, operating as a large global player with limited competition. Target falls to $15.07 from $24.49. Upgrade to Add from Hold.
Sector: Consumer Services.
Target price is $15.07.Current Price is $11.56. Difference: $3.51 – (brackets indicate current price is over target). If IEL meets the Morgans target it will return approximately 23% (excluding dividends, fees and charges – negative figures indicate an expected loss).
