IDP Education (ASX:IEL) is expected to deliver relatively stable earnings despite continued pressure on student placement revenue, supported by cost discipline, resilient International English Language Testing System (IELTS) operations, and a planned fiscal year 2027 share buyback, Jefferies said in a June 19 note.

Jefferies said earnings remain more resilient than revenue, with stronger cost discipline supporting fiscal year 2026 adjusted earnings before interest and taxes margins and expected net cost reductions rising to about AU$30 million from AU$25 million, helping offset ongoing top-line pressure.

The firm expects medium-term earnings support from the AU$50 million fiscal year 2027 buyback and digitalization-driven cost savings, with fiscal year 2025 digital investments further aiding cost reductions over time.

The firm believes student placement weakness will persist in the near term, while revenue may recover modestly on resilient yields and IELTS expansion in China, with limited visibility beyond fiscal year 2026.

The firm cut fiscal year 2026 to fiscal year 2028 revenue forecasts by 2% to 13% due to weaker sentiment in student placement markets. Fiscal year 2026 earnings were raised 48%, while fiscal year 2027 to fiscal year 2028 estimates were reduced 17% to 29% amid limited growth visibility.

Jefferies maintained a buy rating on IDP Education while lowering the price target to AU$3.30 from AU$7.80.