Pearson Outlook is Improving, say Analysts

Revenue rises in large markets such as the UK and Australia are encouraging for the publisher, say Morningstar equity analysts

Morningstar Analysts 4 May, 2018 | 10:17AM
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Pearson equity UK learning stock analysis

Pearson’s (PSON) first-quarter update today contained few surprises and was ultimately in line with Morningstar expectations for the full year. Underlying revenue rose 1%; however, excluding the impact of 2017 exceptional revenue in the growth division, the picture looks somewhat better, with revenue up just over 3% year on year.

We do not expect to make any material changes to our forecasts on the back of these results and reiterate our 800p fair value estimate, against a current share price around 866p. Following a strong recovery in the share price since third-quarter 2017, we believe the shares are currently fairly valued. The company has a narrow moat, which means that it has a limited competitive advantage.

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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar
Rating
Pearson PLC607.20 GBX-2.97Rating

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