Halister News

--ELIZABETH FOURNIER

(Bloomberg) -- DeVry Education Group traded down as much as 11.4% today after announcing CEO change and deal to acquire Acams, an anti-money laundering and financial crimes prevention organization, for $330m; Piper Jaffray analyst Peter Appert says the deal is “strategically appealing, but very expensive.” Piper Jaffray (Peter Appert)

• Acams deal is “inappropriate,” as the company is in turnaround mode
• Management change at DV is good, “could serve as a catalyst to accelerated efforts to rebuild profitability and address lingering legal/regulatory issues”
• DV taking steps to “right-size” DVU unit while growing Healthcare business “would be significant valuation drivers for the stock”
• Maintains overweight rating, PT $35

Credit Suisse (Trace Urdan)

• Believes the managment change not as abrupt as it appears, has been in the works for 3-4 weeks as that is when DV broke off planning new investor meetings
• Expecting a new “transformative” strategy in weeks ahead
• Lisa Wardell taking over at CEO may be the catalyst to unlock value
• Maintains outperform rating, PT $29

Compass Point (Michael Tarkan)

• Deal will help to diversify revenue stream but seems to be expensive considering the parent co has only $334m of cash and securities as of March 31
• Maintains neutral, PT $18

DATA:

• 3 buys, 4 holds, 1 sell, avg PT $23: Bloomberg data
• DV shares down 28.4% YTD
• Short interest 8.9% of float

(Bloomberg) -- BRL’s mild gains show that yesterday’s win by the Temer government on the fiscal target vote failed to generate greater optimism on feasibility of more ambitious reforms, analysts say.

• “The fiscal target approval was Temer’s first victory; however, the votes on constitutional reforms, such as those limiting government spending, are bigger challenges”, Luciano Rostagno, chief-strategist at Banco Mizuho says in a phone interview
• “Temer’s first victory brings some relief,” Joao Paulo de Gracia Correa, head of FX trading at brokerage SLW, says
• “While investors remain cautious, there is this optimism that Temer has much more support than his predecessor to have economic measures approved”
  • Risk-appetite seen in external markets, with stocks and oil rising, also supportive for BRL today, Mizuho’s Rostagno says