Jefferies Downgrades Ambow Education (AMBO) to Hold; Margin Recovery Slowed; Cutting Estimates Given Uncertainties

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Jefferies downgraded Ambow Education (NYSE: AMBO) from Buy to Hold with a price target of $5.30 (from $10.00).

Analyst, Cynthia Meng, said, "Ambow reported weak 1Q12 results due to USD10mn revenue to be delayed to future periods and USD2.3mn additional bad debt provision for adopting new accounting rule. We adjusted down revenue by 4~7% due to revenue recognition uncertainties on the cash basis; and adjusted down profit by ~30% as accelerated center opening is expected to cause margin recovery delays."

Meng lowers FY12 EPS estimate from $0.76 to $0.54, FY13 from $0.98 to $0.67 and FY14 from $1.19 to $0.87.

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

Shares of Ambow Education closed at $3.73 yesterday, with a 52 week range of $3.69-$8.15.

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