CS First Boston downgraded Apollo Group-University of Phoenix Online (UOPX) shares to neutral from outperform.
Analyst Gregory Cappelli says he is downgrading UOPX based on valuation, as UOPX shares have exceeded his $78 target following nearly 125% appreciation over the past year. He still views UOPX as a well-managed, high-growth company that's on track to grow enrollments in excess of 50% in fiscal year 2004 (ending August). He says, given the law of large numbers, he still expects growth to decelerate at a normal pace over the next couple of years, but to sustain in the mid-20% range over next three to five years.
Capelli remains confident in his fiscal year 2004 revenue and EPS estimates of $807 million and $1.40, respectively. He believes the potential for upside is strong.