New Oriental Education downgraded to Neutral from Overweight at JPMorgan

JPMorgan downgraded New Oriental Education (EDU) to Neutral from Overweight with a price target of $50, down from $85, after its Q2 earnings miss and below-consensus guidance. The firm maintains its view that New Oriental is a “great company” and one of the few remaining high-quality compounders in China, adding however that it’s increasingly difficult to defend its stock after four consecutive quarters of guidance misses and estimate cuts, the analyst tells investors in a research note. The market will demand at least a couple of “clean” quarters to re-build confidence, JPMorgan added.