It's been a brutal year for IDP Education Ltd (ASX: IEL) shareholders. The global student placement and English testing giant has seen its share price collapse by more than 60% year to date, hit by a sharp slowdown in international student volumes, tougher competition in English testing, and uncertainty surrounding student visa policies in key markets such as Canada and the UK.
So, can this once-loved growth stock stage a comeback?
Macquarie's view on IDP Education shares
Macquarie thinks there's a glimmer of hope, but they have stopped short of calling a bottom just yet. The broker retains a neutral rating on IDP shares, with a 12-month price target of $6, implying a 26% upside from the current share price of $4.74.
In a report released after Canada's 2025 federal budget, Macquarie said the student visa outlook in Canada was not as bad as feared and could even support modest growth from 2026. The new Canadian cap of 155,000 visas for 2026 applies only to new student visas (i.e. it does not include visa renewals), whereas earlier media reports had mistakenly included visa renewals in the cap, which would have implied a 65% cut across all visa categories.
That distinction matters because it implies the sector may actually grow from the estimated ~80,000 new visas issued in Canada in 2025 to the new cap of 155,000.
Short-term pain for IDP Education shares
Macquarie forecasts IDP's earnings per share to rise just 1% in FY26, followed by 25% growth in FY27 as student flows and English test volumes recover. It notes that the company's return on equity (ROE) should rebound from around 12% to almost 14% by FY27, supported by operational leverage and easing costs.
Still, the broker warns that short-term risks remain high. The ongoing weakness in visa applications, competitive pressure in India, and policy uncertainty in the UK could all weigh on volumes through 2025. Its quant model also ranks IDP poorly on price momentum, which is a reflection of the share price collapse and negative investor sentiment.
IDP Education shares summary
Macquarie's message is clear: the worst may be over, but the recovery won't be quick. The factors that have contributed to IDP Education's share price cratering this year do not seem to be going away any time soon.
So whilst Macquarie's price target for IDP Education is above the current share price, there are significant risks, not least of all the stroke of the pen risk from changes in government policy.
The long-term demand for international education remains strong, and IDP Education has proven in the past that it is a business that can deliver good returns when the industry tailwinds are in its favour. For now, though, it is fighting against tough industry dynamics, and Macquarie is taking a cautious wait-and-see approach.
