DeVry (DV) Beats Estimates, Attractively Priced: Barclays

DeVry Inc.’s (NYSE: DV) enrollment results for Fall ’09 beat Barclays Capital’s (NYSE: BCS) estimates and gives a very positive outlook for FY10 EPS.

Undergraduate enrollments grew by 19.4% YoY above Barclays’ 12.5% estimate. Graduate and online course-takers have grown by a robust 16.5% and 23% respectively. DeVry has experienced a strong demand for all its programs and delivery modalities from the student community.

Analyst Gary E. Bisbee of Barclays has reiterated the price target of $68 and Overweight rating based on DeVry’s sound financials, cash position, rising profitability and high quality assets. The EPS estimates for FY10 and FY11 have also been raised. The current price of $54.29 is an attractive entry point.

Given the pressure in the education sector due to increased regulation and scrutiny, DeVry emerges a strong contender with a clean regulatory history and strong student outcomes. In addition, DeVry’s has a balanced portfolio of schools which should generate double-digit enrollment growth over the next few years.