Goldman Sachs Initiates Coverage On The For Profit Education Sector At Neutral

Goldman Sachs is initiating coverage of the for-profit education sector with a Neutral coverage view. It expects the long-term demand for post-secondary education to grow, but the for- profit sector faces meaningful uncertainty in the current regulatory environment, which Goldman believes has negative implications for both top and bottom line near-term growth. Within this context, Goldman favors companies such as Apollo APOL whose stocks already reflect this negative outlook and who can reposition their businesses through strategic actions taken in anticipation of the final regulations, while avoiding names that may have higher exposure to at-risk programs under the final gainful employment rules. Catalysts include promulgation of the final gainful employment rules; timing remains uncertain but should be published in the coming months and the release of new enrollment trends with quarterly reporting. APOL closed Friday at $42.11