Analyst Note| Zain Akbari, CFA |
Our $56 per share valuation of wide-moat Wiley should not change significantly after it announced its third-quarter earnings. Although its results suggest our near-term outlook may be overly optimistic considering a tepid student enrollment environment, the reversal of our prior expectation that U.S. corporate tax rates would rise in 2022 should largely offset the valuation effect. Our long-term forecast remains in place (mid-single-digit percentage top-line growth and roughly 20% adjusted EBITDA margins). The shares strike us as modestly attractive at their current trading price.