3P Learning's 1H results missed Morgan Stanley's sales forecast and there was a much more meaningful 2H skew to earnings (EBITDA) than expected. A material year-on-year improvement for cash flow was noted.

The broker suggests a meaningful acceleration is required to get to the lower-end of management's revenue guidance of for betwen $112-115m.

Earnings guidance was lowered by -$2m to allow for additional costs associated with the Edmentum transaction.

Target $1.20. Equal-weight. Industry view: In-Line.

Sector: Consumer Services.

Target price is $1.20.Current Price is $1.12. Difference: $0.08 - (brackets indicate current price is over target). If 3PL meets the Morgan Stanley target it will return approximately 7% (excluding dividends, fees and charges - negative figures indicate an expected loss).

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