Shares of Santa Ana-based Corinthian Colleges Inc. got a boost on Tuesday after a Lehman Brothers analyst raised his price target on the vocational school operator’s stock on expected enrollment gains and revenue growth.
Corinthian shares rose more than 5% in early afternoon New York trading and closed up 1.6% on a market value of about $1.1 billion.
The company, which runs more than 100 schools in the U.S. and Canada, offers degrees and certificates in healthcare, automotive technology, criminal justice, technology and other areas.
The jump in Corinthian’s share price comes after the company’s investor conference last week where it told analysts it expects yearly revenue to grow 10% to 12% in the next three years. Its student body is projected to grow 6% to 8% in the same time frame, the company said.
For the 12 months through June, Wall Streets expects $1 billion in yearly sales.
Lehman analyst Gary Bisbee called Corinthian’s figures “bullish,” saying he was upbeat about the company’s gains in marketing, admissions and student retention.
Tuition hikes this fall are expected to offset higher costs, the analyst said.
Bisbee raised his target price for Corinthian’s shares by $4 to $14, an expected return of more than 12%.
Corinthian’s shares now trade at about $13.
Bisbee also said he expects the company’s profit for the 12 months through June 2009 to increase 12% to 47%.
Analysts polled by Thomson Financial expect Corinthian’s profit to grow 42% in 2009.
For the past few years, Corinthian has struggled with falling enrollment and more recently a shrinking number of student loans being made amid the credit crisis.
