Brean Capital Raises Price Target on New Oriental Education (EDU) Following Strong 3Q

Brean Capital reiterated a Buy rating on New Oriental Education (NYSE: EDU), and raised the price target to $49.00 (from $41.00), following the company's 3Q earnings report. EDU reported F3Q16 revenue of $346.9 million, ahead of consensus’ estimate of $336.0 million. Revenue was driven by continued acceleration in overall enrollments. Non-GAAP EPS was $0.34, beating Street’s estimate of $0.32 by two cents.

Analyst Anne Shih commented, "New Oriental extended its track record thus far with another strong quarter in F3Q16 results, with overall enrollment growth better than expected and YoY improvements in utilization driving outperformance in revenue and earnings. EDU’s momentum in K12 continued, and we believe the company’s other categories - overseas and domestic test prep, adult English - benefited from a counter-cyclical boost (see our note “EDU and XRS Brands Strength Supports Our Growth Thesis”, April 13, 2016) and some O2O product rollouts in these categories. We remain positive on the company’s strong brand awareness, disciplined network expansion, investments in O2O/online products and services, and two-step strategy to increase its student market share and then flex its pricing power. We reiterate our Buy rating and are raising our target price to $49 from $41, given the company’s solid K12 execution, plans for making further market inroads, and faster pace in margin recovery."

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

Shares of New Oriental Education closed at $39.54 yesterday.

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