Goldman Sachs Comments On ITT 2Q

According to Goldman Sachs, ITT Educational Services ESI reported 2Q results ahead of expectations but the real news in the release was the new enrollment decline of 20%, which was much worse than expected. Goldman Sachs said that 2Q EPS of $2.85 was ahead of GS/consensus ($2.79/$2.64) principally on higher-than-expected revenue and lower share count partially offset by higher cost of ed services and other student services/ admin expenses. “We lower our 12-month, DCF-based price target to $88 from $90 on lower expected free cash flow in 2013 and beyond.” ITT Educational Services closed yesterday at $87.90.