3PL – Morgan Stanley rates the stock as Overweight

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).

 

 

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