Barclays Reiterates an 'Underweight' on Corinthian Colleges (COCO); Enrollment Turn in 2H'12? Remain Cautious
Tweet
Share
E-mailGet Alerts COCO Hot Sheet
Price: $63.35 -2.79%
Rating Summary:
10 Buy, 3 Hold, 0 Sell
Rating Trend:
Up
Today's Overall Ratings:
Up: 8 | Down: 5 | New: 26
Rating Summary:
10 Buy, 3 Hold, 0 Sell
Rating Trend:
Up
Today's Overall Ratings:
Up: 8 | Down: 5 | New: 26
Join SI Premium – FREE
Barclays reiterates an 'Underweight' on Corinthian Colleges (NASDAQ: COCO) price target raised from $2.00 to $2.50.
Barclays analyst says, "Yesterday, Corinthian Colleges reported F1Q'12 results that deteriorated significantly, but also largely met prior guidance. COCO maintained its prior FY'12 EPS guidance and provided an optimistic outlook for new student starts to return to y/y growth in the March quarter. When combined with significant cost cuts, the company expects profitability to rebound sharply in 2H'12 from the expected modest loss in 1H'12...While this outlook is certainly a positive development if achieved, we remain cautious on the stock as we see many risks that warrant a significant valuation discount vs. peers."
"In our view, questions remain surrounding the company's ability to achieve healthy profitability and consistently positive cash flows, which are compounded by student financing risks (both new third party lending agreement and 90/10 compliance), and other regulatory risks. As a result, we find the risk-reward trade-off unattractive, and recommend that investors avoid COCO shares." (Barclays raises FY11 EPS estimate from $0.10 to $0.21, initiates FY12 at $0.36)
For more ratings news on Corinthian Colleges click here and for the rating history of Corinthian Colleges click here.
Shares of Corinthian Colleges closed at $2.18 yesterday.
Barclays analyst says, "Yesterday, Corinthian Colleges reported F1Q'12 results that deteriorated significantly, but also largely met prior guidance. COCO maintained its prior FY'12 EPS guidance and provided an optimistic outlook for new student starts to return to y/y growth in the March quarter. When combined with significant cost cuts, the company expects profitability to rebound sharply in 2H'12 from the expected modest loss in 1H'12...While this outlook is certainly a positive development if achieved, we remain cautious on the stock as we see many risks that warrant a significant valuation discount vs. peers."
"In our view, questions remain surrounding the company's ability to achieve healthy profitability and consistently positive cash flows, which are compounded by student financing risks (both new third party lending agreement and 90/10 compliance), and other regulatory risks. As a result, we find the risk-reward trade-off unattractive, and recommend that investors avoid COCO shares." (Barclays raises FY11 EPS estimate from $0.10 to $0.21, initiates FY12 at $0.36)
For more ratings news on Corinthian Colleges click here and for the rating history of Corinthian Colleges click here.
Shares of Corinthian Colleges closed at $2.18 yesterday.
Serious News for Serious Traders! Try StreetInsider.com Premium Free!
You May Also Be Interested In
- Advance Auto Parts (AAP) PT Lowered to $48 at DA Davidson Following 25% Selloff Post Q2 Results
- Cummins (CMI) PT Lowered to $675 at Jefferies
- Bernstein SocGen on Meta Platforms Inc. (META): 'Risk-reward remains attractive'
Create E-mail Alert Related Categories
Analyst CommentsRelated Entities
BarclaysSign up for StreetInsider Free!
Receive full access to all new and archived articles, unlimited portfolio tracking, e-mail alerts, custom newswires and RSS feeds - and more!
