Adding to the UBS share price target of $25.30 shared by @Jimmy today, I’ve included consensus views from 15 analysts supplied by Simply Wall Street. Share price targets have been tracked against the current share price for the last 2 years in the chart below.

Source: Simply Wall Street

The first thing that strikes me about this chart is how the 12 month price target follows the share price down. It doesn’t give you a lot of confidence in the target if the share price tracks down even further.

The other concern is the low level of agreement amongst analysts on the 12 month share price target with a dispersion of 15%. The highest price target is $29.47 and the lowest is $17.00. The consensus share price target is $23.84.

If the most bearish of the 15 analysts turned out to be correct and we bought IDP Education shares today at 3 year lows of $17.18, we would be down 1% in 12 months time. If we included 40 cps in dividends (77% franked, 53 cps gross), we would be up 2% on our investment in 12 months time. That’s not a great outcome, but if that’s the down side I’d be happy to cop that.

If the upside is analyst consensus of $23.84 we could be up over 40% in 12 months time, including the dividends.

Of course all 15 analysts could turn out to be wrong, and the shorters might be correct. During the COVID 19 pandemic IDP Education fell to a low of $10.89, so it’s possible for the share price to fall even further.

However, all these opinions are based on a 12 month horizon, and I’m more interested in how IDP Education will be performing in 2 to 3 years from now.

Source: Simply Wall Street

Well thats interesting.

The Canadian Immigration Department (IRCC) has announced they will now accept test results from four new english testing schemes from mid August. This is for their Student Direct immigration stream.

IDP will therefore no longer have a regulation advantage for its IELTS testing - though it should be noted this is bringing Canada into line with other jurisdictions such as the UK and Australia. While IELTS is the most recognised test globally, its clear there are now some competitive pressures.

Not sure how to interpret this for long run growth assumptions, but am far more interested in the story given the 15% drawdown on the stock today.

·      September 2022 Intake Education ~A$83m - is a leading student placement agency that has operations across Nigeria, Ghana, Kenya, Philippines, Thailand, Taiwan, India and the UK. https://www.asx.com.au/asxpdf/20220920/pdf/45f8wf987wtljm.pdf

·      July 2021 Britsh Council’s Indian IELTS operations £130 million IDP and the British Council currently both administer IELTS tests in India operating parallel pan-Indian distribution networks. The Transaction will bring BC IELTS India operations under IDP ownership, establishing a single network that provides the foundation for IELTS to build on its leadership position in India. https://www.asx.com.au/asxpdf/20210701/pdf/44xxdgcsfbcf17.pdf

·      May 2017 HCP Limited (20% Holding) $6.4m - a Chinese company specialising in delivering English language test preparation materials via social media and its mobile app. https://www.asx.com.au/asxpdf/20170607/pdf/43jsyhjp2q548n.pdf

·      Jan 2017 Hotcourses £30.1m with an additional £4.9m representing net cash in the business upon completion - owns and operates a portfolio of education search websites that help future students make the right study choices and connect with universities and colleges around the world. The company provides students with unique online tools to search for appropriate courses and plan their studies. https://www.asx.com.au/asxpdf/20170116/pdf/43fbr2bwjkq1r7.pdf

Capital Raise

·      April 2020 Raised $254m, $225m Institutional, $29 Retail at $10.65 per new share