Wednesday, Credit Suisse initiated coverage of Education Management Corp. (EDMC) stock with a Neutral rating and a price target of $22.
Analyst Flynn thinks EDMC's wide array of degree and disciplinary offerings, coupled with its young campus network and still relatively small online platform, increases the company's addressable market and growth prospects. These factors, coupled with significant remaining margin opportunity, due partly to weight of recent investments, lead the analyst to model a 20%+ 3-5 year net income CAGR off 2009.
The analyst thinks EDMC is subject to sector regulatory risks. However, the analyst believes the company's 35+ years of operating history, relatively clean regulatory track record, below industry average student loan cohort default rates, and solid 86%-90% graduate job placement rates mitigate these risks.
The analyst believes that EDMC's relatively low exposure to the most cyclical Diploma category (~7%) and broad mix of program disciplines make its fundamentals somewhat less countercyclical than most publicly traded peers'.
The analyst said that private loans/internal lending programs funded ~14% of fiscal 2009 revenue. Management expects this to decline to ~9% for fiscal 2010, but the analyst thinks this still relatively high exposure subjects EDMC to risks related to credit market turmoil, loan defaults, and Washington constituents' concerns about the burdens of high student loan balances.
Currently, EDMC is down $0.93 or 4.17% and trading at $21.39.
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June 05, 2026 16:18 ET A busy week for economic news flow saw a slew of reports being released that reflected the trends in the U.S. labor market. In Europe, economic growth and inflation data gained attention as the European Central Bank and Bank of England head for policy session later in the month. In Asia, the monetary policy session of the Indian central bank was in focus as the country, a major oil importer, reels under the pressures of a weaker rupee and rising inflation.