A TILBIAN | NUMIS
We remain firm supporters of Pearson, which has an attractive mix of businesses and offers good value at 14 times earnings supported by a near four per cent yield. However, our preference remains for quality cyclicals such as DMGT, Informa and WPP, which were hit harder in the downturn and have greater scope to rebound.
GIASONE SALATI | EXECUTION
Pearson’s upgraded guidance today is driven by strong market share gains in education, supporting our belief in Pearson’s superior digital offer compared to its rivals. We think Pearson should trade at a 20 per cent premium to the sector, rather than at a small discount. We have a target of 950p.
SAM HART | CHARLES STANLEY
Pearson’s shares have performed strongly in recent months and now appear more fairly valued. Long-term growth prospects, however, remain good. We believe education is a structural growth market and the group’s scale provides a significant advantage over peers. It appears particularly well placed to benefit from the shift towards digital and online learning, given heavy investment in these areas over recent years.