Oppenheimer Outperform on Capella Education
Oppenheimer & Co. is out with a research report on Capella Education Co. (NASDAQ: CPLA) and it has an Outperform rating and a $47 price target on shares.
In a note to clients, Oppenheimer & Co. writes, "3Q11 EPS of $0.66 (-18% y/y) exceeded our estimate/consensus of $0.58/$0.60 via revenue and operating margin outperformance. Starts slid ~36% y/y vs. guidance of -30%, but 4Q11 start guidance of -10% y/y topped expectations by ~200bps and implies a 2Q11 trough. Importantly, 4Q11 total enrollment guidance of -4% to -6% compared favorably to our estimate/consensus of -14%/-10%. Inferring that -7.5% y/y in 3Q11 may have been a trough, CPLA appears to be stabilizing ahead of expectations. This provoked 12% stock price appreciation yesterday vs. the market's -2%. Though modifying our target to $47 from $58, we reiterate our Outperform and anticipate further upside upon CPLA fortifying the implied 3Q11 total enrollment trough via 4Q11 results/1Q12 guidance on its 4Q11 call."
Shares of CPLA gained $3.71 yesterday to close at $35.03.
