Deutsche Bank upgrades Pearson to ‘buy’

by | Jun 21, 2022

Deutsche Bank upgraded Pearson on Tuesday to ‘buy’ from ‘hold’ and hiked the price target to 900p from 625p as it said the educational publisher was “turning over a new leaf”.
“After a period of decline driven by structural issues in the US courseware market, we think Pearson is now back on the path to sustainable growth as it recaptures the second-hand textbook market and innovates its offering,” DB said.

“The journey has been -painful with several years of restructuring, but with the strategy tangibly progressing we turn more constructive.”

The bank expects a 5% group revenue compound annual growth rate over 2021-25E and operating margins to expand from 11% to 15%.

It noted that despite the company’s return to growth, the shares trade on 17x 2022E consensus price-to-earnings, at a discount to its two-year trading average and peers.

Pearson offers a dividend yield of around 3% and a buyback yield of around 4.5%, it said.

At 1040 BST, the shares were up 1.5% at 783.60p.

Related articles

UBS upgrades Anglo American, Antofagasta to ‘buy’

UBS upgrades Anglo American, Antofagasta to ‘buy’

(Sharecast News) - UBS upgraded its stance on miners Anglo American and Antofagasta on Friday to 'buy' from 'neutral'. On Anglo, it said the risk/reward was attractive after underperformance. It noted the shares are down 40% from the high in January, underperforming...

Spirax-Sarco shares have further to fall, says RBC

Spirax-Sarco shares have further to fall, says RBC

(Sharecast News) - RBC Capital Markets has slashed its target price for Spirax-Sarco Engineering from 9,000p to 8,000p and reiterated an 'underperform' rating on the stock, saying the valuation still isn't cheap despite its underperformance this year. "One of the most...

Latest Articles

Join our mailing list

Subscribe to our mailing list to receive regular updates!