Wunderlich Securities Initiates DV At Hold

Wunderlich Securities is initiating coverage on DeVry DV with a Hold rating and a $52 price target. Says Wunderlich, in the report, “We are initiating coverage of DeVry Inc. (DV) with a Hold rating and a $52 price target. If DeVry can meet its guidance and end FY12 within a few pennies of FY11, then the stock is wildly underpriced and the market has dramatically overreacted to last week's earnings call, in our view. On the other hand, if management is true to its word and will not cut expenses, then the sort of negative leverage that its DeVry undergraduate business is likely to see next year makes this goal implausible. Add to that challenge the arrival of a new CFO and we are inclined to move to the sidelines until we have more clarity or a better answer from management.” DV closed at $41.12 yesterday.