business

Piper Jaffray Cuts DeVry to Underperform

Analyst Mark Marostica cites lackluster student undergraduate enrollment growth for the summer term

Piper Jaffray downgraded DeVry (DV ) to underperform from market perform.

Analyst Mark Marostica says the education provider's fourth-quarter earnings per share is in line with his estimate and 1 cent below the Street's estimate. He downgraded as lackluster new student undergraduate enrollment growth for the summer term creates more uncertainty. He notes DeVry's technology-focused student base, general information-technology malaise, and a lackluster near-term IT job outlook will likely continue to thwart new student undergrad enrollment growth.

Marostica says changes in DeVry's marketing strategy could be costly to implement with uncertain results. He believes the shares should trade at a discount to its peer group. He cut the $1.02 fiscal 2005 (Jun.) earnings per share estimate to 94 cents.

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