Wells Fargo downgraded Apollo Group from Outperform , to JUNK..PT from $35 to $17
Wells Fargo downgraded Apollo Group (NASDAQ: APOL) from Outperform to Market Perform and cut its valuation range from $32-$35 to $17-$19 following the company’s FQ2 earnings report.
In its downgrade, the firm said while attractive cash flow could spark a rally at the earliest sign of stable demand, "we fear that the negative effects of the company's campus closures could persist for several more quarters, pushing a likely catalyst into CY2014."
Wells Fargo cut FY2013 EPS estimate to $2.77 from $2.80 and FY2014 estimate to $2.20 from $2.83.
Apollo's new advertising strategy doesn't appear to be significantly increasing demand, the analyst believes. Moreover, the stock can't rebound significantly until the company's new enrollment stabilizes, and Apollo's management doesn't seem to know how to make that happen, he wrote. Urdan slashed his price target range on the shares to $17-$19 from $32-$35.