G8 EDUCATION LIMITED (GEM)
Share Price Analysis and Chart

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26/02/2025

3

Neutral

$1.30

2.77%

Further analysis suggests G8 Education outperformed both industry and UBS expectations in 2024, yet weak 2025 occupancy to date has been the focus.

The broker suggests part of the spot occupancy weakness may be holiday timing related and the operating environment should improve as several benefits such as lower inflation flow through.

Guidance appears cautiously optimistic to the broker and a Neutral rating is maintained. Target edges down to $1.30 from $1.35.

FORECAST
UBS forecasts a full year FY25 dividend of 6.00 cents and EPS of 9.00 cents.
UBS forecasts a full year FY26 dividend of 7.00 cents and EPS of 11.00 cents.

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06/05/2025

1

Buy

$1.49

17.79%

G8 Education's trading update at the AGM revealed year-to-date occupancy as of April 20 was down -3% y/y compared to Canaccord Genuity's forecast for flat growth in FY25. The broker is, however, positive growth will improve in 2H25 and accelerate into 2026.

Several reasons for subdued conditions currently include the supply of centres exceeding demand, the timing of Easter holidays, cost of living pressures and the late start to school year. In FY26, some of these factors will fade including early start to school year, Easter holidays timing and easing in cost of living pressures.

Additionally, the broker expects the scrapping of activity test will lift demand in FY26 to 4.6% from 3.2% demand in FY24.

Buy. Target trimmed to $1.49 from $1.51 on downward revision to FY25 earnings forecast.

FORECAST
Canaccord Genuity forecasts a full year FY25 dividend of 6.00 cents and EPS of 9.70 cents.
Canaccord Genuity forecasts a full year FY26 dividend of 6.30 cents and EPS of 11.20 cents.