UPDATE: Morgan Stanley Downgrades TAL Education Group

In a report published Thursday, Morgan Stanley analyst Philip Wan downgraded TAL Education Group XRS to Equal-weight from Overweight, raising its price target to $25.00 from $17.60. According to the report, XRS delivered a robust F3Q, driven by stronger enrollment growth and better cost control. The analysts stay positive on China's K-12 tutoring market and the company's leading market position, yet taking profit due to rich valuation is recommended. “Given the company's premium brand and solid execution, we believe it is well positioned to capitalize on growing demand and industry consolidation in China's K-12 tutoring market,” the report noted. “Yet rich valuation leads us to recommend taking profit and wait for a better entry point.” XRS closed Wednesday at $25.61.