The second day of negotiation of the week was good for New educational group and oriental technology (Educational -1.59%)) shareholders. On the back of upgrading an analyst’s recommendations, their stock increased by more than 13% higher prices. Which absolutely crushed the S&P 500‘s (^ GSPC -0.00%)) 1.1%increase.
Inexpensive and attractive, says the prognosis
This decision was made by JP Morgan, in the person of analyst DS Kim. That morning, Kim changed his recommendation on New Oriental overweight (buy, in other words) of his previous neutral. His new price objective is $ 62 per share, which, even after the Tuesday price, is almost 12% compared to the current level of the action.
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According to reports, Kim’s new view is not based on new estimates – he has maintained his existing projections – rather, his attractive valuation after a sustained sale.
He also believes that New Oriental is entering its 2026 exercise with significantly better perspectives than the previous year. Finally, he wrote that he expects the company to considerably increase its yields to shareholders.
I hope the third time is the charm
The new Oriental is surely happy to have gone to exercise 2025 (its 2026 began on June 1). The last two gains reports for the previous year were not inspiring, to say it slightly – in both, the company has seriously missed the estimates of consensual analysts for net income. In addition to that, in one, he beat the income, and only, slightly ($ 1.04 billion against the collective estimate of $ 1.03 for the second quarter).
Although the stock is relatively cheap now, I am not convinced that it is a good irresistible deal. These shortcomings of income were substantial and worrying. Meanwhile, the Chinese economy is not as strong as it was in the past.
Investors will expect better performance of the company when it reports its last quarter for the year 2025; This has not yet been officially planned, but should occur mid-tank.
Eric Volkman Has no position in the actions mentioned. The Motley Fool has no position in the actions mentioned. The Word’s madman has a Disclosure policy.