Oppenheimer Lowers Estimates On Strayer Education Inc. (STRA)

Oppenheimer & Co. is lowering its estimates on Strayer Education Inc. STRA. It still rates shares at Perform. In a note sent to investors, Oppenheimer writes, "We're lowering our 2011 EPS estimate to $8.80 (-9% y/y) from $11.35 (+18% y/y) after STRA's winter enrollment conference call. STRA reported new enrollment/total enrollment growth of -20%/+4% y/y, both significant decelerations. We assume flat y/y enrollment and +4.4% y/y revenue growth in 2011 (see page 2 for STRA's updated 2011 Business Model). Management largely attributed its pressured enrollment growth trends to negative press translating to lower response rates, most notably in its direct media channels. STRA indicated it is maintaining its planned eight new campus openings in 2011, though may offer fewer classes if enrollment ramps slower than its historical experience. We maintain our Perform rating pending increased clarity on enrollment trends and regulatory issues." Shares of STRA lost $34.64 yesterday to close at $118.60.