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发帖数: 462 | 1 Keyword: price recover, mid-term election
Losers Change Mkt Cap
APOL Apollo Group, Inc. -25.47% 5.44B
EDMC Education Management Corp -20.42% 1.51B
DV DeVry Inc. -17.32% 2.96B
CECO Career Education Corp. -16.11% 1.38B
ESI ITT Educational Services, Inc. -15.99% 1.86B
* Apollo shares down 25 pct, sector drops 20 pct
* Analysts cut estimates, downgrade ratings
* Stocks seen trading down. May recover near Nov midterms (Recasts, with
early trading levels, fresh analyst quotes)
BANGALORE, Oct 14 (Reuters) - U.S. for-profit education stocks tumbled to 6-
week lows on Thursday after sector bellwether Apollo Group (APOL.O) withdrew
its 2011 outlook amid regulatory uncertainty, and forecast sharp falls in
new student enrollments.
Apollo shares slumped 25 percent to a near 4-year low, dragging down rivals
such as Corinthian Colleges (COCO.O) and Career Education (CECO.O).
The sector index .15GSPEDUS was down 19.4 percent at its lowest in 30 months.
Apollo said its response to tough new proposals would significantly impact
its ability to attract and retain new students. Executives also blamed
negative press coverage for impacting student enrollments. [ID:nSGE69B0KN]
Analysts cut their 2011 earnings estimates for Apollo and downgraded their
ratings on the stock.
"We feel strongly that the company is making appropriate positive strategic
changes. However, the upfront disruption will be significantly greater than
earlier anticipated," said Stifel Nicolaus analysts, who cut their rating to
"hold" from "buy."
FBR Capital Markets cut Apollo to "underperform" from "market perform" to
reflect the expected significant decline in enrollments and earnings for "
what is likely to be the next several years."
Robert W Baird analyst Amy Junker cut her 2011 EPS estimate by 11 percent to
$4.97, and forecast 2012 earnings of $4.89 a share. Apollo earned $5.35 a
share, before items, in fiscal 2010.
Apollo's gloomy outlook underlines the impact that tighter regulatory
scrutiny is having on the for-profit sector, and sets a benchmark for rivals
yet to report latest quarterly earnings. [ID:nSGE6950LG]
In June, Apollo had forecast high-single digit revenue growth for fiscal
2011, with flat operating income, excluding some items -- which analysts had
thought signalled a bottom.
But Apollo's withdrawal of this outlook could be a sign that things will get
worse before they get better, with the industry facing criticism for
leaving students saddled with debt and not fully prepared for the workplace.
For TAKE A LOOK: [ID:nSGE67G0IH]
Apollo and its peers have moved to prepare themselves for new rules due to
be finalized on Nov. 1, including taking steps to weed out 'high risk'
students -- those who may struggle to repay debts -- hitting new student
enrollment numbers.
Apollo's new student enrollments fell 10 percent in June-August, and it
forecast a 40 percent drop for its current first quarter. The company said
it would be 2012 before it saw any growth in new student numbers.
RBC Capital Markets cut its price target by $10 to $45, and said: "Investors
now wonder: How much worse can enrollment growth get?"
William Blair analyst Brandon Dobell said Apollo "continues to frustrate
investors" with its volatility and the lengthy timeframe it has communicated
for a return to strong growth.
But Dobell believes Apollo's efforts will lead to a more sustainable and
potentially more profitable business in the long term.
"While Apollo is taking a hit now to make a massive change to its operating
strategy, we believe others will follow its lead," said Morgan Stanley
analyst Suzanne Stein.
"We expect the group to trade down significantly on the back of Apollo's
results, but could start to recover as we approach the (early November)
midterm elections." (Reporting by A.Ananthalakshmi in Bangalore, Editing by
Ian Geoghegan) ((a***************[email protected]; within U.S. +1 646
223 8780; outside U.S. +91 80 4135 5800; Reuters Messaging: ananthalakshmi.
a************[email protected])) |
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