Scholastic initiated with "buy"

05/24/06 - Stifel Nicolaus

NEW YORK, May 24 (newratings.com) - Analyst Drew Crum of Stifel Nicolaus & Company initiates coverage of Scholastic Corporation (SCHL) with a "buy" rating. The target price is set to $37.

In a research note published this morning, the analyst mentions that the upcoming publication of Harry Potter (HP) #7 lends significant upside to the company’s share price. Scholastic’s margins are likely to improve going forward due to cost saving measures, including a $40 million overhead reduction scheme, migration of business to the Internet and mix changes towards higher margin Educational Publishing, the analyst says.