Stock of the Week: Pearson

Education publisher has been an unlikely beneficiary of the GameStop saga, but what are its long-term prospects as learning moves online?

James Gard 26 February, 2021 | 10:56AM
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Stock of the Week

With children about to return to school in England next month, education, education, education has been the theme of the latest stock of the week. Our Twitter followers have chosen FTSE 100 educational publisher Pearson (PSON) ahead of rivals.

Pearson was founded in the nineteenth century as construction company and is best known for owning the Financial Times newspaper and Penguin Books. 2015 was a watershed year for the company as, after a many years of buying stakes in other media and publishing firms, it announced it was focusing solely on education. Before the internet, publishing was a high-margin business with learners, schools and universities having no choice but to buy expensive textbooks and Pearson’s bumpy journey in recent years has reflected the disruption faced by the industry, and the company’s transition to a digital future. The shift to online learning during the pandemic, which has even further weakened the case for textbook-based education, has proved another obstacle for the company.

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James Gard  is content editor for Morningstar.co.uk

 

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