Career Education (CECO) responded to an amended class action complaint. Piper Jaffray kept its outperform rating on the shares.
Analyst Mark Marostica says he combed through the amendment, which contained detailed allegations, including falsifying student info and improper accounting practices. While he doesn't profess to be a legal expert, and can't comment on the outcome, he believes specific allegations contained in the amendment have re-kindled investor concerns surrounding alleged falsification of student records. Thus, he expects the company's p-e multiple to be under pressure in the near term as specific content of amendment gain wider dissemination. Overall, Marostica believes Career Education's fundamentals remain strong, and he is confident in his second-quarter estimates. He kept his outperform rating and $80 price target on the shares.