What analysts are saying: Cautious about education firms

  • Updated: January 12, 2013 - 5:32 PM

CAUTIOUS ABOUT EDUCATION FIRMS

Baird Equity Research analyst Jeffrey Meuler is cautious about the for-profit education sector. His recent industry report had a "neutral" rating on 10 of the 12 companies he covers, including Minneapolis-based Capella Education Co.

The sector underperformed the S&P 500 the past four years and faces competitive, regulatory and economic headwinds. Meuler sees more students shifting to traditional colleges. He's encouraged by Capella's progress but is watching for signs of success with its new marketing strategy.

NEW AD TARGET: GROCERIES

One bright spot in Target Corporation's otherwise bleak December sales was groceries. In recent years, nearly all of its stores have been renovated to sell food.

With grocery sales increasingly important, Target launched a new ad campaign to remind shoppers of the relatively new offering. Target and ad agency Mono in Minneapolis created eight new TV spots that treat groceries like fashion accessories.

Twin Cities retail consultant Stan Pohmer told the Star Tribune last week: "They've reached a tipping point where their grocery business is now ready for national advertising."

PATRICK KENNEDY

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