Apollo Group (APOL), the nation’s largest for-profit educator, is set to report second-quarter earnings on Monday, but Citigroup analyst James Samford is already lowering his expectations.
Today, Samford maintained his Neutral rating on the stock, but lowered his price target to $48 from $57, while also trimming his estimates: He now sees fiscal 2012 EPS of $3.27 (down from $3.44), and earnings in fiscal 2013 of $3.12 (18% lower than his prior estimate of $3.82).”
Samford wrote that the downward revisions were due to competition — especially from traditional universities ramping up their online presence — as well as other secular trends that are weighing on enrollment. However, with the stock down about 20% year-to-date, Samford noted that it might not have much farther to fall, removing it from Citi’s Least Preferred List as he sees “increasing valuation support.”
