UPDATE: Piper Jaffray Upgrades ChinaEdu to Overweight on Improved Earnings Growth Outlook

In a report published Monday, Piper Jaffray analyst Mark A. Marostica upgraded the rating on ChinaEdu Corporation

from Neutral to Overweight, and raised the price target from $6.75 to $10.00. In the report, Marostica noted, “We are upgrading CEDU from Neutral to Overweight for the following reasons: 1) On the back of solid FY12 online degree program enrollment growth of 12% y/y, we believe Spring 2013 enrollments are tracking to our 8% y/y estimate, with the potential for modest upside; 2) We expect the top-line momentum in the company's learning center business (11% of revenue) will continue, and we believe utilization improvements will drive better learning center profitability in FY13; 3) We feel the company's cost structure is now stable, given effective cost controls implemented throughout FY12; 4) We have thus raised our long-term earnings growth rate assumption from 5% to 10%; 5) CEDU shares are attractive at current levels. We are raising our price target from $6.75 to $10 (7.5x CY13E PF EPS of $0.81 plus net cash of $3.87/share). Shares of CEDU are currently trading at 4x CY13E PF EPS ex: net cash.” ChinaEdu Corporation closed on Thursday at $7.08.