Shares of New Oriental Education & Technology Group (NYSE: EDU) rose on June 12 after Goldman Sachs upgraded the Chinese education company’s stock to “Buy” from “Neutral” and raised its 12-month price target to $65.
New Oriental shares closed at $46.67, gaining 3.25% during the trading session following the analyst upgrade.
The move reflects growing optimism about the company’s business performance and growth prospects as China’s private education sector continues to stabilize and diversify following years of regulatory changes.
New Oriental is one of China’s largest private education providers, offering a broad range of educational services, test preparation courses, overseas study consulting, educational products, and livestreaming e-commerce services.
The analyst upgrade comes after the company reported strong fiscal third-quarter results in April.
For the quarter ended February 28, 2026, New Oriental posted net revenue of $1.42 billion, up 19.8% from a year earlier. The company said growth was primarily driven by expanding contributions from its newer education initiatives.
Operating income increased 44.8% year-over-year to $180.3 million, while net income attributable to shareholders climbed 45.3% to $126.8 million.
Operating margin improved to 12.7% from 10.5% in the same period a year earlier, reflecting stronger profitability as revenue growth outpaced operating expenses.
For the first nine months of fiscal 2026, New Oriental generated revenue of $4.13 billion, representing a 13% increase from the prior-year period. Net income attributable to shareholders rose 13.3% to $413 million.
The company also maintained a strong balance sheet, ending the quarter with approximately $1.78 billion in cash and cash equivalents, alongside $1.49 billion in term deposits and $1.95 billion in short-term investments.
Looking ahead, New Oriental expects fourth-quarter revenue to increase between 15% and 18% year-over-year, reaching between $1.43 billion and $1.47 billion.
Management also raised its full-year fiscal 2026 revenue outlook, forecasting annual revenue growth of 13% to 14%, driven by continued momentum across its education and consumer-focused businesses.
The Goldman Sachs upgrade suggests analysts see additional upside potential as New Oriental continues to deliver revenue growth, margin expansion, and strong cash generation while benefiting from improving demand across its diversified education platform.
