Barclays Maintains an 'Equalweight' on Apollo Education (APOL); Lower F'12 Profit Outlook Confirmed

Barclays maintains an 'Equalweight' on Apollo Education (NASDAQ: APOL), PT $42.

Barclays analyst says, "As expected, starts and enrollments fell 45%/12% y/y, respectively, due to APOL's orientation program and new admissions model, and a difficult overall operating environment. APOL guided for F3Q'11 starts to decline at a similar 40%+ y/y rate. On a positive note, APOL generated $39M of 2Q free cash flow (vs. -$1M y/y), used $75M to repurchase 1.8M shares (~$43/share), and ended 2Q with $848M of net cash."

"Due to the F2Q upside and FY'11-'12 outlook, we are raising our FY'11 EPS
estimate by $0.19 while reducing FY'12 by $0.62, and now estimate $4.33/$3.03, or 19%/30% y/y declines, respectively...In our view, APOL is taking the right steps to improve student outcomes and de-risk its biz, but the near-term impact of orientation program and new admissions model will be highly negative for enrollments, margins, & earnings in FY'11 and FY'12."

For more ratings news on Apollo Education click here and for the rating history of Apollo Education click here.

Shares of Apollo Education closed at $40.55 yesterday.

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