UPDATE: Citi Lowering Price Target on ITT Educational Services

Citi Investment Research is out with a research report on ITT Educational Services Inc (NYSE: ESI) and is lowering its price target to $68 from $70, but it has a Neutral rating on shares.

In a note to clients, Citi Investment Research writes, "Q3 revenue of $361MM was in line with CIRA/Street, but $116MM Adj EBITDA and $2.48 in EPS came in above Street at $109MM and $2.28, respectively. ESI raised FY2011 guidance range from $10.00-$10.50 to $10.40-$10.60 (vs. Street at $10.34), but implied Q4 EPS of $2.12-$2.32 barely bracketed the Street at $2.30. While ESI's 2012 outlook may seem conservative, uncertainty around new third party loan program and questions related to the magnitude of potential payments on prior risk sharing agreements and loan guarantees are likely to remain unresolved for a while. More clarity and transparency would go a long way to calm investor concerns, in our view."

Shares of ESI closed at $62.07 yesterday.