No reprieve for international student flows. PO cut to $2.25

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No reprieve for international student flows. PO cut to $2.25

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IDP Education

No reprieve for international student

flows. PO cut to $2.25

Reiterate Rating: UNDERPERFORM | PO: 2.25 AUD | Price: 2.31 AUD

Reiterate Underperform; cut PO to $2.25 13 July 2026

We lower our PO to $2.25 (from $5.25) and reiterate Underperform on IEL. The outlook Equity

for international student mobility continues to deteriorate into 2026 with most study

destinations tightening further. The US is seeing higher visa scrutiny, Canada is capping

Key Changesstudent intake, and the UK has weakened its proposition through shorter post-study

work permit and difficult pathway to PR. Investors expected Canada's tightening to (A$) Previous Current

benefit Australia demand. However, Australia has recently raised visa fees and lifted visa Price Obj. 5.25 2.25

rejection rates. Combined with weaker source-market currencies, this is driving a 2027E EPS 0.27 0.22

softening of study abroad demand, a negative for IEL’s placement & IELTS volumes. We 2028E EPS 0.29 0.23

cut our EBIT forecasts by 15–18% and estimate FY27/28E EBIT of $115m/$119m, 2026E EBITDA (m) 184.6 181.3

implying no growth for next 2 years, with risks skewed firmly to the downside. 2027E EBITDA (m) 199.1 176.8

Placement recovery to remain elusive through FY28 2028E EBITDA (m) 215.3 183.7

We forecast placement volumes to decline another 10% in FY27E after witnessing 20- Sriharsh Singh >>

30% declines in FY25/26. Over 80% of placement volumes relate to Australia & UK, Research Analyst

where new visa approvals remain under pressure and student demand is being weighed Merrill+61 2 9226Lynch5308(Australia)

down by higher rejection rates, rising tuition fee and difficult pathway to PR. Markets sriharsh.singh@bofa.com