UPDATE: Oppenheimer Upgrades China Distance Education Holdings to Outperform, Names $8 PT on Momentum Pick-Up, Anticipated Revenue
In a report published Thursday, Oppenheimer analyst Ella Ji upgraded the rating on China Distance Education Holdings (NYSE: DL) from Perform to Outperform, and named an $8.00 price target.
In the report, Oppenheimer noted, “We are upgrading DL to Outperform from Perform and introducing an $8 target. Momentum in its core accounting test prep services has picked up, and we anticipate a 23%/35% revenue/EPS CAGR for FY12-14. As the new APQE test date approaches, F2Q cash revenues have jumped 41% & F3Q QTD numbers indicate an even more robust trend, reversing previous qtrs' unfavorable comps. Longer term, we believe DL's strengthened position will continue to assist its market share gain. In addition, considering DL's strong FCF generation, we believe the board is pro to another solid dividend following the two $0.48 dividends in last two years (8% yield). Our $8 target is based on 15x our FY14E EPS of $0.43 plus $1.55 cash/share.”
China Distance Education Holdings closed on Wednesday at $6.23.
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