Report published September 23, 2026
Goldman Sachs: China Education Aug-Q Preview – Defensive Growth at a Reasonable Price; Buy EDU/TAL
Goldman Sachs · September 23, 2026
Goldman Sachs previews the August quarter results for China Education leaders New Oriental (EDU) and TAL Education Group (TAL), reiterating Buy ratings on both with 12-month target prices of US$71 and US$16.1 respectively. The report highlights temporary revenue growth convergence (+22-23% yoy) alongside significant non-GAAP operating margin expansion led by operational discipline and AI-enabled efficiencies.
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Finvaulta summarizes Goldman Sachs's analysis. Attribute opinions, forecasts, time-sensitive values, and chronology to the issuer and report date; do not treat this page as an independent verification or a current market-data source.
Key Takeaways
- 1.Goldman Sachs reiterates Buy ratings on both EDU (12m TP US$71 / HK$55) and TAL (12m TP US$16.1), offering 30% and 36% upside potential respectively, supported by defensive business models and 18%/40% operating profit CAGRs over the next 3 years.
- 2.Revenue growth for EDU and TAL is expected to converge in the August quarter (+23% yoy for EDU vs. +22% yoy for TAL in US$ terms) for the first time in three years, though TAL is expected to outpace EDU longer term.
- 3.Profit expansion is the primary focus in FY27, with non-GAAP OPM expected to expand +0.7pp for EDU and +5.7pp for TAL in the seasonally strongest quarter, driven by disciplined capacity expansion, AI efficiencies, and marketing cost controls.
Table of Contents
- CHINA EDUCATION
- Aug-Q Preview: Defensive growth at a reasonable price; Buy EDU/TAL
- What else to look for into results?
- New Oriental Education & Technology (EDU/9901.HK): Expect 1QFY27 beat; Eyes on AI-enabled content solutions progress and cost control; Buy
- Forecast changes (EDU)
- Valuation (EDU)
- TAL Education Group (TAL): Profit expansion to continue on disciplined learning center expansion and costs control; Buy
- Forecast changes (TAL)
- Valuation (TAL)
- Investment Thesis - TAL Education Group
- Price Target Risks and Methodology - TAL Education Group
- Investment Thesis - New Oriental Education & Technology
- Price Target Risks and Methodology - New Oriental Education & Technology
Report data
Exhibit 1: We anticipate revenue growth convergence between EDU and TAL in Aug-Q, the first time since 3 years ago, with EDU/TAL growing at +23%/+22% yoy
| Metric | Estimate | Context |
|---|---|---|
| 12-month Target Price (ADR) | 71.0 USD | EDU target price updated from US$70 to US$71 |
| 12-month Target Price | 16.1 USD | TAL target price raised from US$15.9 to US$16.1 |
| 1QFY27E Net Revenue (EDU) | 1878 USD mn | EDU 1QFY27 net revenue modeled up 23% yoy |
| 2QFY27E Total Revenue (TAL) | 1051 USD mn | TAL 2QFY27 total revenue modeled up 22% yoy (+16% yoy on cFX) |
| 1QFY27E Non-GAAP Operating Margin (EDU) | 22.6% | EDU non-GAAP OPM expanding 0.7pp yoy |
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