UPDATE: Benchmark Downgrades New Oriental Education (EDU) to Hold
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Benchmark analyst Fawne Jiang downgraded New Oriental Education (NYSE: EDU) from Buy to Hold.
The analyst comments "Along with our sector downgrade, we are downgrading EDU Stock from Buy to Hold. We expect the Opinions on Further Alleviating the Burden of Homework and After-School Tutoring for Students in Compulsory Education (the Opinion) released by the China government over the weekend will have a profound impact on in the AST industry and adversely change the course of the operation and the financial outlook of the industry participants. We acknowledge there is salvage value in EDU stock. EDU, with its relatively diversified revenue stream (~30% non K-12), large cash balance, and operating efficiency, will likely be a survivor. However, it is clear we are entering an uncharted territory with substantial moving parts. Our downgrade reflects our limited visibility on the industry landscape post the reset on top of the uncertain timeline as to how long it will take for the dust to settle. As such, we have decided to step to the sidelines."
Shares of New Oriental Education closed at $2.93 yesterday.
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