UPDATE: Morgan Stanley Raises PT on Apollo Group to $61

Morgan Stanley has published a research report on Apollo Group

and has raised the price target from $56 to $61 after the company exceeded sell-side estimates. In the report, Morgan Stanley writes, "APOL significantly outperformed our expectations for F1Q and its enrollment outlook shows that the turnaround story is well under way. While investors clearly were optimistic going into earnings (stock is up almost 30% in past three months vs. peers ~10%) so may be disappointed that mgmt lowered the top end of F12 op income guidance from $780mm to $750mm, we had previously been at $730mm so have raised our numbers. Moreover the reason for the cut to guidance is investing to drive better results in F13 and beyond, which coupled with stronger new enrollments (the underlying driver of the business), should all be viewed positively. On expenses, student acq. costs appear contained, although may have to come up to maintain start growth longer-term. Also, APOL continues to buy back its stock at a solid pace." Morgan Stanley maintains its Overweight rating on Apollo Group, which is currently trading up $3.07 from yesterday's $53.72 closing price.