Morgan Stanley slashes price target on New Oriental Education & Technology Group Inc. [EDU] – find out why.


New Oriental Education & Technology Group Inc. [NYSE: EDU] slipped around -0.01 points on Friday, while shares priced at $1.86 at the close of the session, down -0.53%. The company report on November 14, 2021 that New Oriental Education & Technology Group Inc. Provides Business Updates.

New Oriental Education & Technology Group Inc. (“New Oriental” or the “Company”) (NYSE: EDU and SEHK: 9901), a provider of private educational services in China, today provided business updates following the recent regulatory developments relating to after-school tutoring services, including the Opinions on Further Alleviating the Burden of Homework and After-School Tutoring for Students in Compulsory Education, published in July 2021 by the General Office of the CPC Central Committee and the General Office of the State Council (the “Opinion”) and the related implementation rules, regulations and measures promulgated by competent authorities.

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In compliance with the Opinion and applicable rules, regulations and measures, the Company plans to cease offering tutoring services related to academic subjects to students from kindergarten through grade nine (“K-9 Academic AST Services”) at all learning centers across China by the end of 2021. The Company expects that the cessation will have a substantial adverse impact on the Company’s revenues for the fiscal year ending May 31, 2022 and subsequent periods. In the fiscal years ended May 31, 2020 and 2021, the revenues from offering K-9 Academic AST Services accounted for approximately 50% to 60% of the Company’s total revenues for each fiscal year.

New Oriental Education & Technology Group Inc. stock is now -11.43% down from its year-to-date (YTD) trading value. EDU Stock saw the intraday high of $1.94 and lowest of $1.845 per share. The company’s 52-week high price is 19.97, which means current price is +2.76% above from all time high which was touched on 01/03/22.

Compared to the average trading volume of 35.46M shares, EDU reached a trading volume of 21606121 in the most recent trading day, which is why market watchdogs consider the stock to be active.

What do top market gurus say about New Oriental Education & Technology Group Inc. [EDU]?

Based on careful and fact-backed analyses by Wall Street experts, the current consensus on the target price for EDU shares is $7.98 per share. Analysis on target price and performance of stocks is usually carefully studied by market experts, and the current Wall Street consensus on EDU stock is a recommendation set at 2.00. This rating represents a strong Buy recommendation, on the scale from 1 to 5, where 5 would mean strong sell, 4 represents Sell, 3 is Hold, and 2 indicates Buy.

Morgan Stanley have made an estimate for New Oriental Education & Technology Group Inc. shares, keeping their opinion on the stock as Overweight, with their previous recommendation back on August 30, 2021. While these analysts kept the previous recommendation, Deutsche Bank dropped their target price from $20.10 to $2.50. The new note on the price target was released on July 27, 2021, representing the official price target for New Oriental Education & Technology Group Inc. stock. Previously, the target price had yet another drop from $11 to $2.40, while Daiwa Securities kept a Neutral rating on EDU stock.

The Average True Range (ATR) for New Oriental Education & Technology Group Inc. is set at 0.14, with the Price to Sales ratio for EDU stock in the period of the last 12 months amounting to 0.74. The Price to Book ratio for the last quarter was 0.64, with the Price to Cash per share for the same quarter was set at 3.67.

How has EDU stock performed recently?

New Oriental Education & Technology Group Inc. [EDU] fell into the red zone at the end of the last week, falling into a negative trend and dropping by -11.43. With this latest performance, EDU shares dropped by -13.49% in over the last four-week period, additionally sinking by -71.30% over the last 6 months – not to mention a drop of -89.65% in the past year of trading.

Overbought and oversold stocks can be easily traced with the Relative Strength Index (RSI), where an RSI result of over 70 would be overbought, and any rate below 30 would indicate oversold conditions. An RSI rate of 50 would represent a neutral market momentum. The current RSI for EDU stock in for the last two-week period is set at 40.09, with the RSI for the last a single of trading hit 37.37, and the three-weeks RSI is set at 41.90 for New Oriental Education & Technology Group Inc. [EDU]. The present Moving Average for the last 50 days of trading for this stock 2.0952, while it was recorded at 1.8960 for the last single week of trading, and 5.8577 for the last 200 days.

New Oriental Education & Technology Group Inc. [EDU]: Deeper insight into the fundamentals

Operating Margin for any stock indicates how profitable investing would be, and New Oriental Education & Technology Group Inc. [EDU] shares currently have an operating margin of +3.49 and a Gross Margin at +52.37. New Oriental Education & Technology Group Inc.’s Net Margin is presently recorded at +7.82.

Return on Total Capital for EDU is now 2.56, given the latest momentum, and Return on Invested Capital for the company is 6.37. Return on Equity for this stock inclined to 8.74, with Return on Assets sitting at 4.00. When it comes to the capital structure of this company, New Oriental Education & Technology Group Inc. [EDU] has a Total Debt to Total Equity ratio set at 44.01. Additionally, EDU Total Debt to Total Capital is recorded at 30.56, with Total Debt to Total Assets ending up at 21.30. Long-Term Debt to Equity for the company is recorded at 33.55, with the Long-Term Debt to Total Capital now at 23.30.

Reflecting on the efficiency of the workforce at the company, New Oriental Education & Technology Group Inc. [EDU] managed to generate an average of $24,650 per employee. Receivables Turnover for the company is 36.38 with a Total Asset Turnover recorded at a value of 0.51.New Oriental Education & Technology Group Inc.’s liquidity data is similarly interesting compelling, with a Quick Ratio of 1.90 and a Current Ratio set at 1.90.

Earnings analysis for New Oriental Education & Technology Group Inc. [EDU]

The progress of the company may be observed through the prism of EPS growth rate, while Wall Street analysts are focusing on predicting the 5-year EPS growth rate for EDU. When it comes to the mentioned value, analysts are expecting to see the 5-year EPS growth rate for New Oriental Education & Technology Group Inc. go to 14.81%.

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Insider trade positions for New Oriental Education & Technology Group Inc. [EDU]

There are presently around $1,704 million, or 62.10% of EDU stock, in the hands of institutional investors. The top three institutional holders of EDU stocks are: BLACKROCK INC. with ownership of 64,024,190, which is approximately -18.384% of the company’s market cap and around 0.20% of the total institutional ownership; MORGAN STANLEY, holding 54,714,708 shares of the stock with an approximate value of $101.77 million in EDU stocks shares; and VANGUARD GROUP INC, currently with $100.7 million in EDU stock with ownership of nearly 3.132% of the company’s market capitalization.

Positions in New Oriental Education & Technology Group Inc. stocks held by institutional investors increased at the end of January and at the time of the January reporting period, where 131 institutional holders increased their position in New Oriental Education & Technology Group Inc. [NYSE:EDU] by around 393,942,785 shares. Additionally, 285 investors decreased positions by around 670,988,824 shares, while 29 investors held positions by with 148,668,325 shares. The mentioned changes placed institutional holdings at 916,263,284 shares, according to the latest SEC report filing. EDU stock had 55 new institutional investments in for a total of 129,179,433 shares, while 174 institutional investors sold positions of 380,246,318 shares during the same period.