Piper Jaffray Positive on New Oriental Long Term (EDU)

Piper Jaffray rated New Oriental Education (NYSE: EDU) as Overweight in a research report released today, with a price target of $112.

New enrollment is up only 8% for this first summer quarter, well below the 18.4% estimate. This was likely due to the shorter summer break this year vs. last year, as well as the Shanghai World Expo drawing potential students away. However, a 74% year to year growth in deferred revenue gave Piper Jaffray confidence that the enrollment slowdown will be short-lived.

It went on to say that despite speedbumps like the earnings miss listed in the new pre-released quarterly revenue report - $192.9 million, below the Street's $195.8 million estimate – that it believed that New Oriental's educational platform delivery modes would ultimately be successful. The official quarterly results should be released by October 18.

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