Apollo Group (APOL) shares rose immediately after the company posted better than expected fiscal second quarter earnings results late on Monday. But this morning the for-profit educator’s shares are down about 7.6%.
Analysts at Citigroup and Credit Suisse questioned the company’s ability to meet earnings targets as it struggles to grow enrollment. Credit Suisse analyst Kelly Flynn downgraded the company to Neutral from Outperform and lowered the price target to $40 from $60.
“Apollo is taking the high road by focusing on academic quality, and we recognize that potential tweaks to marketing initiatives and orientation criteria could boost new enrollments in coming quarters; but, we are less confident in growth prospects now.”
Flynn had upgraded the company to Outperform last October on hopes that it could grow enrollment.
