DeVry (NYSE:DV) Margins Pressured, But Among Top in Sector

As with all the companies in the for-profit educational sector, DeVry's (NYSE:DV) margins will be under pressure going forward, but they remain one of the top companies in the sector.

FBR says, "Although we anticipate slowing enrollment growth and rising costs related to new student acquisitions, compliance, and necessary investments in education services to pressure margins, we continue to believe DeVry remains among the better-positioned companies in the group due to its higher quality and more diversified student population. As such, we believe DeVry offers investors a better risk-adjusted way to capture potential upside in the for-profit industry.

"To account for the better-than-expected F2Q11 results and a stronger 2H11 outlook, we are raising our FY11 and FY12 EPS estimates to $4.64 and $4.45, respectively, from $3.91 and $3.67. Note that our estimates do not take into account possible impacts of gainful employment regulations."

FBR Capital maintains an "Outperform" rating on DeVry (DV), which was trading at $52.07, gaining $4.69, or 9.90 percent, as of 1:03 PM EST. FBR raised their price target on DeVry from $50 to $55.