By Christiana Sciaudone
Investing.com — Bright Horizons (NYSE:) fell more than 7% after Morgan Stanley (NYSE:) downgraded shares on changing work habits.
Bright Horizons provides day care to, among others, working parents who need occasional support. Working from home has changed those needs, and revenue and profit have accordingly decreased. Nonetheless, Morgan Stanely noted that its a valuation has recovered to pre-pandemic levels.
“With the potential for changing on-site work dynamics post COVID, we think this could result in daycare becoming more local to employee homes and lead to increased competition for BFAM,” said analyst Toni Kaplan, according to StreetInsider. “This may pressure top-line growth and drive multiple contraction for BFAM’s valuation that has recovered to pre-COVID levels.”
Kaplan downgraded Bright Horizons to a sell-equivalent from neutral with a price target of $150 from $153.
Shares had rallied about 50% over the past 12 months, despite lower sales as a result of the pandemic-driven work from home trend.
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