Capella Education (CPLA) Price Target Raised to $70 at Barrington Research

Barrington Research maintained an Outperform rating on Capella Education (NASDAQ: CPLA) and raised its price target to $70.00 (from $65.00). The change follows Q2 results.

Analyst Alexander Paris said, "New enrollment increased 11.1% in the second quarter, which was impressive given the tough comp (Q2/13 +12.7%), above the StreetAccount consensus (+4.3%) and management’s guidance, which called for growth in the “mid-single digits.” Total enrollment decreased 0.6% in the quarter, above the StreetAccount consensus estimate (-1.1%) and management’s guidance, which called for a decline of 1-2%."

"Total enrollment is expected to increase 1.0-2.0% versus a current consensus of “flat.” New enrollment is expected to be up at a rate similar to Q2/14, versus a current consensus of +4.8%. Like enrollment, revenue is expected to be up 1.0-2.0%, suggesting revenue of $101.7-102.7 million (slightly above the current consensus of $101.6 million) and operating margins are expected in a range of 10.5-11.5% (in line with the current consensus of 11.1%). As such, based on our calculations, EPS ought to come in a range of $0.50-$0.56 (vs. a current consensus of $0.54)," he added. "For 2014 we now expect revenue of $420.7 million (+1.2%), above our prior estimate of $418.6 million, and diluted EPS of $2.90 (+3.6%), above our prior estimate of $2.89. For 2015, our estimates call for revenue of $433.3 million (+3.0%), above our prior estimate of $428.1 million, and diluted EPS of $3.14 (+8.3%), above our prior estimate of $3.09."

For an analyst ratings summary and ratings history on Capella Education click here. For more ratings news on Capella Education click here.

Shares of Capella Education closed at $57.16 yesterday.

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