UPDATE: Bank of America Merrill Lynch Downgrades Apollo Group to Neutral, Lowers PT
In a report published Wednesday, Bank of America Merrill Lynch downgraded its rating on Apollo Group (NASDAQ: APOL) from Buy to Neutral, and lowered its price target from $40.00 to $28.00.
BofA Merrill Lynch noted, “Apollo remains in a period of significant transition as it faces continued new student start declines, an increasingly competitive environment and more price sensitive students. Apollo is not standing still. It is increasing its career focus and aligning itself with corporations. It froze tuition for incoming students & announced cost cutting initiatives which should generate >$300mn (8% of costs) in savings over the next two years. We are pleased to see the action. However, with continued disappointing new student start trends, limited visibility into the timing of improving starts, & little sign of student retention improvements, we find it difficult to recommend shares of Apollo despite significant weakness YTD. We downgrade to Neutral and await signs of improving trends.”
Apollo Group closed on Tuesday at $27.49.
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