This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

The Five Dumbest Things on Wall Street This Week: July 27

2. DeVry's Daffy Downgrades

Look, we understand it's not easy for Wall Street analysts to get it right all the time. And we'll also be the first to admit that predicting the future is a tough, often thankless task, especially with critics like us braying at their bad calls while neglecting the good ones.

All that said, those morons really blew it big time with DeVry (DV) this week.

Shares of the for-profit educator shattered Tuesday, falling 25% to barely above $20, after the company sliced its fiscal fourth-quarter earnings outlook as a result of lower enrollment. DeVry said it now expects to earn 43 to 46 cents per share on revenue of between $500 million and $510 million for the period when it reports results August 9.

So what were Wall Street's prognosticators estimating prior to DeVry's pre-announcement? Well, how about 79 cents per share in earnings on revenue of $519.2 million.

Oh yeah, they whiffed big time, which surprised us considering all the recent calamities in the industry. Seriously, after Bridgepoint Education's (BPI) selloff over accreditation worries earlier this month, Apollo Group's (APOL) shellacking in March due to enrollment declines and Career Education's (CECO) collapse last year as a result of improper placement lawsuits, one would think that the analyst community would have sharpened their pencils when it came to their DeVry outlook.

Nonetheless, based on their sky-high original targets for the company, that clearly was not the case. Despite all the carnage in the for-profit education sector, they obviously didn't learn their lesson.

RW Baird has subsequently cut its price target to $23 from $35. Bank of America Merrill Lynch downgraded DeVry to neutral and lowered its price objective to $23 from $37. Citigroup went to $25 from $40. JPMorgan, $23 from $35. Topeka Capital, $23 from $40.

Look, we know that DeVry is an industry leader and has so far avoided stepping on the most serious mines that have been blowing up its competitors. But that does not excuse these Wall Street analysts from stupidly luring investors onto the minefield with sky-high price targets in the first place.

4 of 5

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 17,180.06 +48.09 0.28%
S&P 500 2,002.72 +3.74 0.19%
NASDAQ 4,559.8470 +7.0880 0.16%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs