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Pearson PLC PSON

Rating as of

Morningstar’s Analysis

Valuation
Currency in GBX
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Is it the right time to buy or sell?
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1-Star Price

PREMIUM

5-Star Price

PREMIUM

Economic Moat

PREMIUM

Capital Allocation

PREMIUM

So Far So Good in 2021 for Narrow-Moat Pearson

Michael Field, CFA Senior Equity Analyst

Analyst Note

| Michael Field, CFA |

Almost spookily, narrow-moat Pearson’s revenue rose by 17% in the first half of the year, the exact quantum by which it fell in the first half of 2020. Operating profit swung back into the black, following the loss posted at this point last year. No changes to full-year 2021 guidance, but management have stated that they expect operating profit to be in line with market expectations, something that should reassure investors, given the numerous profit warnings posted by the company in recent years. We did not see anything in the release to change our view on the stock, and reiterate our GBX 870 fair value estimate. With the shares having almost doubled off their March 2020 lows, we see only modest upside with the name.

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Company Profile

Business Description

U.K.-listed Pearson is the world’s largest educational provider. The company has been disposing of noncore businesses such as the Financial Times, The Economist, and publishing house Penguin, and is now focused on being an educational resource and testing provider. While Pearson’s primary activity centres on higher-level education, the firm also has significant operations in providing clinical assessments, professional certification and testing.

Contact
80 Strand
London, WC2R 0RL, United Kingdom
T +44 2070102000
Sector Communication Services
Industry Publishing
Most Recent Earnings Dec 31, 2008
Fiscal Year End Dec 31, 2021
Stock Type
Employees 21,937

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