IEL -7.52%: the student placement and English testing company slumped to more than 3-year lows today following a weaker-than-expected trading update. The company has seen a significant roll-off in volumes across the business in the second half and has guided to flat EBIT FY24 vs FY23, ~10% below consensus estimates. They have noted more restrictive international student policy that is also expected to weigh in the medium term, predicting a 20-25% decline in the total market over the next 12 months. Whilst the company remains confident the market will return to growth, IDP is moving to reduce the cost base to reduce earnings pressure, though we still expect to see earnings downgrades coming through after today’s update.
- The stock remains heavily shorted despite a recent wave of short covering, further closing out of positions likely supported the stock today which finished well off the early lows as short sellers took profits.
MM remains neutral IEL
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