UPDATE: BMO Downgrades Education Management to Underperform; Stock Moves to the Downside

Early this morning, BMO Capital Markets analyst Jeffrey Silber downgraded Education Management EDMC to from Market Perform to an Underperform rating, while increasing its price target from $7.00 to $10.00 per share. While the call was stated to be primarily valuation based, Silber stated that he expects enrollment to slowly decline while Art Institute tuition will remain frozen. Silber went on to say that he expects the company to generate enough cash flows to service its heavy debt load. Following the rating, traders looked to be taking it as a queue to bid the stock down, dropping 2.89 percent to $14.86 early in premarket trading.