Zhao Yin International: Raises New Oriental's target price to $82, and updates adjusted operating profit forecast.

CMB International published a research report indicating that New Oriental announced its performance for the third quarter of the 2026 fiscal year, with net income increasing by 20% year-on-year to $1.42 billion, which is 4% higher than market expectations, mainly due to the stable growth of new education initiatives and favorable exchange rates. Management expects that net income for the fourth quarter of the 2026 fiscal year will increase by 15% to 18% year-on-year, reaching $1.43 billion to $1.47 billion, higher than the market's expectations of $1.43 billion, and expressed optimism about further improvement in profit margins for the fourth quarter and the 2027 fiscal year. The bank raised its operating profit forecast for New Oriental for the fiscal years 2026 to 2028 by 5% to 14% based on non-GAAP accounting standards to reflect the steady growth and efficiency improvement of the core education business; using the sum-of-the-parts valuation method, the target price for New Oriental's US stock was raised from $78 to $82, while maintaining a "buy" rating. Looking ahead to the fourth quarter of the 2026 fiscal year, the bank expects revenue from new education business, high school tutoring, domestic adult exam tutoring, and overseas related businesses to increase by 20%, 17%, 25%, and 1% respectively.