UPDATE: Bank of America Slashes $23 off Strayer Education PO, Rates Neutral
Bank of America has reduced its price objective on Strayer Education (NASDAQ: STRA) from $75 to $52 per share and maintained its Neutral rating.
Bank of America noted, "Student starts up, but dividend cut and no new campuses Strayer announced a number of changes with 3Q results, including suspending its regular dividend but increasing share re purchase authorization. Strayer also has no plans to open new campuses in 2013. This, in addition to a 2013 outlook below consensus, drove shares down 17%. Suspending the dividend was a negative in our view, but growing new student starts and a low valuation (9x on lowered 2013E EPS) keep us Neutral. We forecast 2013 to be the trough in earnings but uncertainty is high. We are lowering our target by $23 to $52, or 10.5x CY13E, below our prior 13.5x target and vs. peers at 10.2x. Our income rating moves from Same/Higher (7) to Pays no cash dividend (9) on the suspension."
Strayer Education closed at $46.51 on Friday.
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