UPDATE: Morgan Stanley Downgrades DeVry on Muted 4Q Outlook

In a report published Tuesday, Morgan Stanley analyst Suzanne E. Stein downgraded DeVry DV from Overweight to Equal-Weight, and removed the $35.00 price target.

In the report, Morgan Stanley noted, “With no sign of a recovery at DVU, we see no fundamental reason for the stock's recent move. Despite a successful effort to improve DV's cost structure (identifying ~$100mm in annual savings with more likely to come), there has been no stabilization in enrollments, which is required to drive top line growth. Recent performance by peers (notably Apollo) suggests that without major tuition cuts, enrollments are likely to continue to decline; but even with discounting, long-term revenue growth remains at risk. DV's new scholarship program may help starts near term, but does not seem large enough to move the needle. Our forecast calls for a weak 4Q at DeVry University, and though our base case calls for this segment to bottom in F14, timing of this remains uncertain.”

DeVry closed on Monday at $31.00.