Figma Shares Indicated To Open $105/$110
On Monday, Citi reaffirmed its Buy rating and $106.00 price target for New Oriental Education (NYSE:EDU). The firm's stance comes as the company announced a special dividend of $0.60 per American Depositary Share (ADS), amounting to approximately $100 million.
This dividend is part of New Oriental Education's broader strategy to increase shareholder value, which also includes a recently announced $300 million boost to its share repurchase program, bringing the total incremental return to shareholders to $400 million.
The special dividend and the expanded buyback plan were announced following the stock's closing price of $71.41 on August 16, which implies a yield of approximately 3.43%. The special dividend itself represents a yield of around 0.84%, while the additional share repurchase authorization accounts for a yield of 2.58%.
Citi notes that while this capital return to shareholders is modest, it may not significantly impact the share price immediately. The influence on the stock value will likely hinge on the pace at which the buybacks are executed.
Citi's commentary emphasizes that despite the short-term effects of the dividend and buyback on the stock price, the firm remains positive about New Oriental Education's long-term market position. This sentiment is backed by detailed analysis in recent education sector reports conducted by the firm.
Looking ahead, Citi is set to host the China Industrial, SMID/Education, and Transport Conference on September 25-26. The conference will feature a variety of companies from the education sector and will serve as a platform to evaluate potential changes in the dynamics of the industry.
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