Truist Securities downgraded Strategic Education (NASDAQ: STRA) to Hold from Buy and lowered its price target to $85 from $95, citing a more challenging outlook for revenue growth. Shares declined more than 3% intra-day Tuesday following the downgrade.
The firm said it sees a more difficult path for the company to achieve consensus revenue estimates in 2026, with demand remaining weak at Strayer and Education Technology Services (ETS) facing tougher year-over-year comparisons following the first year of a major retail partnership.
While Truist acknowledged that the stock appears inexpensive and expressed encouragement regarding increased capital returns, it emphasized that U.S. Higher Education (USHE) needs to return to enrollment growth for the stock to gain traction.
The firm concluded that the combination of subdued demand and more difficult comparisons warranted a more cautious stance, leading to the rating downgrade and revised price target.
