Morgan Stanley Speculates How PEAKS Restatement Could Affect ITT Educational Services


In a report published Wednesday, Morgan Stanley analyst Suzanne E. Stein reiterated an Equal-Weight rating and $25.00 price target on ITT Educational Services (NYSE: ESI).

In the report, Morgan Stanley noted, “Our Equal-weight rating is based on a view that while operating results appear to be improving, there is ongoing regulatory risk for ESI. With a price target of $25 per share, we see the stock as fairly valued. ESI's business seems to be deteriorating, though some of this is explained by a different lead generation strategy. We expect a rebound to occur alongside increased discounting. While the company will consolidate PEAKS loans, which removes some of the overhang on the stock, there are still a number of outstanding regulatory issues which will weigh on the stock.”

ITT Educational Services closed on Tuesday at $16.44.

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