Neutral on G8 Education

Hi Peter, I wonder if you have any research on G8? I have looked at what Morningstar has to say on them, and they look pretty sound, but we got badly burnt on ABC hence the jitters. After all, surely childcare is a pretty strong market? Appreciate your feedback.

A: Thank you for the question.

I can’t get that excited about G8 Education (ASX GEM), although the price metrics are reasonably positive.

As for the major brokers, they are neutral to positive. According to FN Arena, consensus target price is $3.55, a few cents above the current price.

Trading on a multiple of 14.4 times forecast FY17 earnings, 13.1 times FY18 earnings. Forecast dividend yield is 6.9%.


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