According to "The Big Bank," Bank of America Securities raised the target price for New Oriental to 55.6 yuan, with quarterly results exceeding expectations

Bank of America Securities research report indicates that New Oriental-S (09901.HK) reported revenue and profit margins for the fiscal quarter ending in November that exceeded expectations. Revenue growth accelerated to 15%, surpassing the guidance of 9% to 12%. The non-GAAP operating profit margin expanded by 4.8 percentage points, also accelerating quarter-on-quarter, and was above the guidance of "over 1 percentage point."

The company has provided revenue growth guidance of 11% to 14% for the third fiscal quarter ending in February and has raised its full-year revenue guidance for the year ending in May to USD 5.3 billion to USD 5.5 billion, representing a year-on-year growth of 8% to 12%, higher than the previous guidance of 5% to 10%. The main drivers are the K12 business, Dongfang Zhenxuan (01797.HK), and a narrowing decline in overseas exam preparation business. The share repurchase progress is in line with expectations, with USD 86 million utilized as of January 27, against a total repurchase amount of USD 300 million, valid until October 2026.

Based on better-than-expected performance and raised guidance, the firm has increased its non-GAAP earnings per share forecasts for fiscal years 2026 and 2027 by 6% and 7%, respectively. The target price for New Oriental (EDU.US) in the U.S. stock market has been raised from USD 67.1 to USD 71.3, and the target price for H shares has been raised from HKD 52.3 to HKD 55.6. The "Buy" rating is reaffirmed, with expectations that the company will continue to be in a cycle of "better-than-expected performance and raised guidance," leading to gradual improvement in investor confidence