Piper Jaffray Maintains Overweight on New Oriental Education (EDU)

Piper Jaffray is out with its report today on New Oriental Education EDU, maintaining Overweight. In a note to clients, Piper Jaffray writes, "We continue to recommend EDU shares in anticipation of top line growth momentum and continued improvement in operating leverage. New Oriental delivered solid Q3 results with both top and bottom line well above PJC and Street estimates. Operating leverage emerged in the quarter with Q3 operating margins up 70bps y/y to 16%, on the back of a slowdown in learning center openings and effective cost control measures. The company guided Q4 revenue between $114.3mil - $118.6mil, bracketing our estimate of $118.3mil and Street consensus of $116.2mil. We rate EDU OW with a $125 price target (27.5x CY12E PF EPS)." At the time of posting, shares of EDU were trading pre-market at $122.00, up 2.78% from Tuesday's close.