New Oriental Education Upgraded to Strong-Buy by HSBC Analysts

New Oriental Education & Technology Group (NYSE: EDU) received a significant upgrade from HSBC Global Research, which elevated its rating from “hold” to “strong-buy” in a research note released on Wednesday. This upgrade reflects growing confidence in the company’s performance and potential, according to Zacks.com.

Several other analysts have also recently revised their assessments of New Oriental Education. Notably, China Renaissance upgraded its rating from “hold” to “strong-buy” just a day later. In contrast, Zacks Research shifted New Oriental Education from a “strong sell” to a “hold” rating on December 29, 2023. Meanwhile, JPMorgan Chase & Co. increased their target price for the stock from $60.00 to $68.00, assigning it an “overweight” rating in a report dated October 29, 2023.

The Goldman Sachs Group maintained a “neutral” rating with a price target of $60.00 on the same date. Currently, two analysts classify the stock as a strong buy, while four have issued a buy rating and three have assigned a hold rating. According to data from MarketBeat.com, New Oriental Education holds a consensus rating of “Moderate Buy” with an average price target of $65.84.

Recent Earnings and Investor Activity

New Oriental Education reported its latest earnings results on January 28, 2024. The company achieved an earnings per share (EPS) of $0.45 for the quarter, surpassing the consensus estimate of $0.34 by $0.11. Revenue reached $1.19 billion, exceeding expectations of $1.16 billion. The firm also reported a return on equity of 11.29% and a net margin of 7.40%. This represents a 14.7% increase in revenue compared to the same quarter the previous year, when the company earned an EPS of $0.22.

Analysts predict that New Oriental Education will post an EPS of 2.75 for the current year, indicating continued optimism among market observers.

Investor activity has also reflected the growing confidence in New Oriental Education. Various large investors have recently adjusted their holdings. For example, First Beijing Investment Ltd increased its stake in the company by 31.4% in the third quarter, now owning 9,346,501 shares valued at approximately $496 million after acquiring an additional 2,231,169 shares.

Aspex Management HK Ltd also boosted its stake by 18.8% in the second quarter, bringing its total to 6,981,188 shares worth about $376.6 million. Meanwhile, Alkeon Capital Management LLC saw a substantial increase, lifting its holdings by 101.3% to 2,193,486 shares valued at $118.3 million.

About New Oriental Education

Founded in 1993 by Michael Yu Minhong in Beijing, New Oriental Education & Technology Group has grown into one of China’s leading providers of private educational services. The company specializes in language training, test preparation, and consulting for overseas studies, offering a wide range of subjects including English language courses, preparatory classes for examinations like the TOEFL, GRE, and GMAT, as well as K-12 after-school tutoring.

New Oriental’s curriculum is delivered through a combination of in-person learning centers and digital platforms, allowing students from various regions to access its educational resources. As the company continues to expand, its recent upgrades by analysts suggest a positive outlook for its future growth and performance.