UBS Maintains a 'Neutral' on The Washington Post (WPO); Q2 Review: Woes at Kaplan Continue, but Good Expense Mgmt

UBS maintains a 'Neutral' on The Washington Post (NYSE: WPO), price target lowered from $430 to $420.

UBS analyst says, "Still unclear if/when Kaplan starts improve; good expense management - Starts declined YoY by 47% at Kaplan (48% in Q1), but excluding Kaplan Commitment starts declined by 36% (41% in Q1). The modest deceleration in the rate of decline is a positive sign, but given easing YoY comparisons we were expecting more (starts down 31%). Despite generating less revenue than we had modelled ($362M vs. $378M), Kaplan Higher Ed posted a better operating margin ($51M ex $5.5M severance charge vs. $38M) – given operating deleverage in the postsecondary business we applaud management for good cost controls." (UBS raises FY11 from $24.01 to $25.71. FY12 lowered slightly from $21.89 to $21.86)

For more ratings news on The Washington Post click here and for the rating history of The Washington Post click here.

Shares of The Washington Post closed at $382.85 yesterday.

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