Oppenheimer Continues To Like DeVry (DV)

Oppenheimer & Co. has an Outperform rating and $54 price target on for profit college DeVry Inc. DV after the company reported a strong quarter. In the research report, Oppenheimer & Co. says, "DV delivered F4Q10 EPS/revenue of $0.99 (+78% y/y)/$507M (+28% y/y), respectively, which exceeded our estimates/consensus of $0.76/$0.82 and $469M/$487M. Strong BT&M and Chamberlain enrollment growth more than offset Ross and Carrington softness. BT&M graduate enrollment growth was a five-year record, with undergrad enrollment remaining elevated. The only DV metric below expectations (Ross and Carrington were anticipated) was BT&M undergrad starts (+10% y/y) vs. consensus (+15% y/y) in an otherwise impressive quarter. DV mainly avoided regulatory/legislative "hypotheticals." Reiterating our Outperform on DV's low valuation via recent group pressure, our PT modifies to $54. Though robust multiple expansion appears unlikely near term (regulatory/legislative overhang), DV is intriguing via active/effective highlighting of its quality/value differentiation." Shares of DeVry are falling sharply, down $1.64 to $43.67.