Deutsche Bank downgrades Bridgepoint Education (BPI -8.2%) to Sell from Hold with a PT of $13 (implying a potential downside of 34% from Friday's close).
Analyst Paul Ginocchio: "With the recent price reductions at University of Phoenix and Strayer, Ashford is now the most expensive of these national online players. We have lowered our estimates for Ashford University as we now assume they will have to lower their tuition price in the coming year to remain competitive."
Ginocchio slashes his 2014 estimate to significantly below consensus, from revenue/EPS of $649M/$0.47 to $620M/$0.22.
Bridgepoint Education (BPI +0.4%) ticks lower, then recovers as California's AG sues the company, seeking hundreds of thousands of records as the state investigates complaints of false advertising at for-profit colleges. AGs in New York, Iowa and North Carolina also are investigating BPI.