Oppenheimer Has Outperform On New Oriental Education & Technology Group

Oppenheimer & Co. has an Outperform rating and a $156 price target on shares of New Oriental Education & Technology Group EDU. In a note to clients, Oppenheimer & Co. writes, "We anticipate strong growth momentum will continue at EDU. We forecast 34%/4% revenue/enrollment (tough y/y comp) growth in F4Q11 (to be released on 7/18), 39%/14% for FY11, and 38%/16% in the coming seasonally strong F1Q12. We continue to expect its overseas test prep, U-Can and Pop Kids tutoring will deliver strong results, also buoyed by healthy tuition increase. We adjusted our EPS estimates due to a higher tax rate assumption. EDU shares declined 16% since its last earnings, likely due to profit taking and also impacted by recent negative sentiment on Chinese ADRs, in our view. Trading at 21x our CY12E EPS excl. $14 cash/share, versus our 3-yr EPS CAGR of 30%, we think current valuation represents an attractive buying opportunity." Shares of EDU gained $1.66 yesterday to close at $107.68, a gain of 1.57%.