First Analysis Ups DeVry With Catalysts Seen In Near-Term

After meeting with DeVry's (DV) management, research firm First Analysis upgraded the for-profit education company to Overweight from Equal Weight, saying that it has a number of positive short-term catalysts, while its new CEO is impressive and has taken a number of positive steps.

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NEAR-TERM CATALYSTS: DeVry University's enrollment trends likely improved significantly this semester, boosted by students who transferred from ITT Technical Institute, which has closed down, wrote First Analysis analyst Corey Greendale. Meanwhile, demand for degrees at the company's Chamberlain College of Nursing remains strong, but enrollment there has been limited due to supply constraints, the analyst wrote. Those constraints should be mitigated next month, the analyst reported. Demand for degrees from DeVry's medical and veterinary schools has remained strong as well, Greendale tells investors. DeVry said it was confident that it will be able to settle by the end of this month a complaint by the Federal Trade Commission regarding the company's graduate employment statistics from 1975-1980. The settlement's cost "will be manageable," and the deal should remove an overhang on the stock and lower the company's legal fees, Greendale wrote.

NEW CEO: Greendale was "impressed" with the "operational perspective" of DeVry's new CEO, Lisa Wardell, along with "her fresh perspective on portfolio management, her views on talent development, her approach to working with policymakers and regulators, and her ability to communicate the DeVry story." The link that Wardell has created between the financial results of each of the company's institutions and its access to capital should improve the company's "financial profile," the analyst stated. Moreover, DeVry will probably continue to focus on student outcomes, regardless of any regulatory changes that the Trump administration enacts, the analyst stated. That focus leaves the company well-positioned to "weather any future changes in political winds," Greendale believes.

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