Oppenheimer Raises 2U Inc PT to $65 vs $55

2U (TWOU) shares were slightly higher on Friday as Oppenheimer raised its price target on the company’s stock to $65 from $55, saying it left the firm’s investor day “more positive” on business trends, the financials outlook, short-courses opportunity with GetSmarter, and the growth strategy.

“We detected a positive tone of the business from management, and the customer presentation with Syracuse highlighted significant growth, value, and plans for further expansion,” Oppenheimer said, adding that they also “left slightly more optimistic that new partners/programs win-rates will remain healthy and in the GetSmarter opportunity.” The broker said it is confident in the company’s ability to reach high profit margins in the long term.

“Though meaningful investments being made currently to accelerate program starts will mitigate margin expansion next year, the investment profile is appropriate given the large market opportunity, and to remain at Tier 1 industry growth rates (30%+).”

Oppenheimer reiterated its outperform rating on 2U.

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