3P Learning intends to merge with Blake eLearning. Morgan Stanley sees a sound basis for the transaction in terms of scale, product mix, customer mix and the potential for meaningful revenue and cost synergies.
The broker also sees scope for greater long-term relevance of 3P Learning stock for investors
On the flip side, the broker notes Blake seems to be cycling a period of accelerated covid sign-up. While acknowledging higher churn and a flatter near-term growth profile to be a logical outcome, Morgan Stanley does not have a clear view on Blake’s margin profile.
The broker maintains its Overweight rating with the target price rising to $1.60 from $1.50. Industry view: In-line.
Sector: Consumer Services.
Target price is $1.60.Current Price is $1.26. Difference: $0.34 – (brackets indicate current price is over target). If 3PL meets the Morgan Stanley target it will return approximately 21% (excluding dividends, fees and charges – negative figures indicate an expected loss).