Skip to main content

Market Overview

Opportunity In Grand Canyon Education 'Restored,' Credit Suisse Upgrades To Outperform

Share:

Credit Suisse’s Trace Urdan upgraded the rating on Grand Canyon Education Inc (NASDAQ: LOPE) from Neutral to Outperform, while raising the price target from $39 to $62.

“With the overhang of the proposed transaction cleared, we believe the LOPE opportunity has become clearer and more compelling,” Urdan mentioned.

Stock Undervalued

Given that the necessary land purchases have been completed, the analyst believes that capex spend has now reached an inflection point and would decline over the next few years. This in turn would drive accelerated free cash flow.

Related Link: American Public Education, Workday And More: Benzinga Volume Movers

Urdan, therefore, believes that the stock is currently significantly undervalued.

“The marginal benefit of easier undergraduate recruiting that might have come with a not-for-profit university in our view would have been more than offset by an institution constrained by debt,” Urdan said.

On the other hand, a residual services firm with increased margins and better ROIC would be unlikely to compensate for its customer concentration, potentially orphaned status and lower market cap.

Catalysts

According to the Credit Suisse report, potential catalysts to the stock include “1) Continued strong enrollment and financial performance in contrast with peers; 2) Fall presidential election leading to less antagonistic approach to sector; 3) Potential geographic expansion into California, New Mexico and/or Nevada.”

Latest Ratings for LOPE

DateFirmActionFromTo
Feb 2021BMO CapitalMaintainsOutperform
Sep 2020Sidoti & Co.UpgradesNeutralBuy
Aug 2020BMO CapitalMaintainsOutperform

View More Analyst Ratings for LOPE
View the Latest Analyst Ratings

 

Related Articles (LOPE)

View Comments and Join the Discussion!

Posted-In: Credit SuisseAnalyst Color Long Ideas Upgrades Price Target Markets Analyst Ratings Trading Ideas

Latest Ratings

StockFirmActionPT
ICADGuggenheimInitiates Coverage On24.0
SMBKRaymond JamesUpgrades27.0
WNSNeedhamMaintains88.0
EFXNeedhamMaintains260.0
GOOGLJefferiesMaintains2,700.0
View the Latest Analytics Ratings
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Premarket Activity
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Fintech Focus
A daily collection of all things fintech, interesting developments and market updates.
SPAC
Everything you need to know about the latest SPAC news.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at vipaccounts@benzinga.com