On Tuesday, Barclays maintained its Equalweight rating on Pearson PLC (LON::LN) (NYSE: PSO) with a price target of GBP10.55.
The firm’s assessment followed Pearson’s reported 5% organic growth for the third quarter, surpassing Barclays’ forecast of 3% growth. The Higher Education (HE) sector exceeded expectations with a 4% increase, while the Assessment & Qualifications (A&Q) business reported a robust 6% rise. However, the English Language Learning (ELL) and Workforce Skills divisions did not perform as well as anticipated.
The company’s overall performance for the first nine months of 2024 aligns with projections after accounting for rounding. Barclays highlighted the significance of Pearson’s consistent progress, noting it positively that the company is on track with its objectives. Pearson has confirmed that its full-year guidance remains unchanged, although some timing effects are expected to influence the fourth quarter results.
The analyst from Barclays pointed out that the company’s ability to meet its targets is encouraging. The commentary specifically mentioned that Pearson’s performance in the Higher Education and A&Q sectors contributed to the company’s positive trajectory. Nonetheless, the ELL and Workforce Skills segments fell short of expectations, indicating varied performance across different divisions of the company.
Pearson’s reiteration of its full-year guidance suggests a stable outlook for the company’s financial performance. The analyst’s remarks indicate that while some fluctuations are anticipated in the fourth quarter due to timing effects, the overall picture remains consistent with the company’s strategic plans.
The maintained Equalweight rating and price target by Barclays reflect a neutral stance on Pearson’s stock, suggesting that the shares are valued appropriately based on current information. The analyst’s comments underscore Pearson’s achievement in staying on course with its forecasted growth and operational goals.
In other recent news, Pearson PLC’s shares have been the subject of multiple analyst adjustments. UBS raised the price target for Pearson shares to GBP12.00 from GBP11.30, maintaining a Buy rating. This revision reflects the company’s positive first-half results and steady EBIT guidance for fiscal year 2024, despite encountering some growth challenges.
Citi also expressed confidence in Pearson’s trajectory towards organic growth and higher margins, increasing Pearson’s price target to GBP11.90. However, CFRA maintained a Sell rating on Pearson’s shares, raising the stock’s price target to $11.00, and expressing caution about the company’s prospects, particularly within its Virtual Learning segment.
Pearson’s first-half results showed a 3% growth in underlying sales, primarily driven by the English Language Learning and Assessment & Qualifications segments. The company is on track to meet its 2024 guidance, with growth expected to accelerate in the latter half of the year, largely due to expansion in the Higher Education sector.
These are recent developments in Pearson’s performance and outlook.
InvestingPro Insights
Pearson’s recent performance, as highlighted in the article, is further supported by real-time data and insights from InvestingPro. The company’s market cap stands at $9.52 billion, reflecting its significant presence in the education and publishing sector. Pearson’s P/E ratio of 22.02 and adjusted P/E ratio of 20.59 for the last twelve months as of Q2 2024 suggest a moderate valuation relative to earnings.
InvestingPro Tips reveal that Pearson has maintained dividend payments for 33 consecutive years, demonstrating a strong commitment to shareholder returns. This aligns with the company’s stable performance mentioned in the article. Additionally, Pearson is trading near its 52-week high, which corroborates the positive organic growth reported in the third quarter.
The company’s revenue for the last twelve months as of Q2 2024 was $4.49 billion, with a gross profit margin of 50.58%. This robust margin supports Pearson’s ability to invest in its various divisions, including the Higher Education and Assessment & Qualifications segments that outperformed expectations.
For investors seeking a deeper understanding of Pearson’s financial health and market position, InvestingPro offers 10 additional tips, providing a comprehensive analysis to inform investment decisions.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.