DeVry Jumps on Upgrade After Profit Tops EstimatesLisa Wolfson
DeVry Inc., a for-profit college operator, surged to its highest level since July in New York trading after reporting profit and sales that topped analysts’ estimates and JPMorgan Chase & Co. upgraded the shares.
DeVry climbed 16 percent to $30.41 at the close, the biggest gain since Oct. 26. Shares of the Downers Grove, Illinois-based company have dropped 21 percent in the past year.
New enrollment gains at DeVry’s Chamberlain and Carrington colleges offset a decline in new students at DeVry University. The company has been moving into international markets in Brazil and the Caribbean to provide additional sources of revenue as Congress and state authorities investigate marketing practices at for-profit education companies in the U.S.
“We were impressed by stellar results” in the company’s units outside of DeVry University, and “recognize that DeVry’s diversification strategy is working,” Jeffrey Volshteyn, an analyst at JPMorgan in New York, wrote today in a note. He raised his rating on the shares to neutral from underweight and boosted his 12-month price target to $28 from $22.
Profit excluding items, such as costs related to relocating and consolidating facilities at some of its schools, was 87 cents a share, DeVry said yesterday in a statement. That beat the 59-cent average of analysts’ estimates compiled by Bloomberg. Revenue fell 3.6 percent to $505.2 million, exceeding analysts’ projections of $496.4 million.