While initial indications in India suggest a likely near-term drag on IPD Education’s 2H21 earnings, UBS believes this this represents deferred, not lost revenue, with the ability to recoup in 1H22.
Meanwhile, the broker note, delays in reopening the Australian border will likely impact the seasonally strongest March 2022 intake and the trajectory of the recovery beyond.
Based on its current thesis, UBS expects IDP to emerge a stronger player, leveraging technology to differentiate itself relative to
the long-tail of bricks and mortar student placement businesses.
Buy rating is maintained with the target lowered to $28.25 from $29.05.
Sector: Consumer Services.
Target price is $29.05.Current Price is $22.71. Difference: $6.34 – (brackets indicate current price is over target). If IEL meets the UBS target it will return approximately 22% (excluding dividends, fees and charges – negative figures indicate an expected loss).
