Citigroup Reiterates Hold Rating on Apollo Group (APOL)

Citigroup is out with a research report this morning, where it reiterates its Hold rating on Apollo Group APOL; it has a $48.00 price target on the stock. The Citigroup analysts cited the company's announcement that it has eliminated 700 full-time positions, principally in admissions, representing roughly 4% of University of Phoenix's over 16,000 non-faculty full-time staff. In connection with the reduction in force, the company is expected to incur a $5 million charge in the current quarter (Nov 30, 2010), and benefit from roughly $8 million in lower personnel costs per quarter thereafter. As for valuation, the analyst remarked, “Our $48 price target (PT) is based on the average of our P/E and EV/EBITDA derived price targets of $46 and $51, respectively.”