Shares of FTSE 100-listed Pearson Plc (GB:PSON) were down 2.2% as of writing after the company provided its fourth quarter and full-year Fiscal 2023 trading update. The company reported underlying group sales growth of 5% for Fiscal 2023 and 6% for Q4. These exclude Pearson’s OPM (online program management) and Strategic Review businesses, both of which have been separated from Pearson. Further, Pearson retained its full-year adjusted operating profit guidance to be between £570 and £575 million.
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London-based Pearson is a multinational education and publishing company. The former owner of The Financial Times, The Economist, and publishing house Penguin, now focuses on providing educational resources and tests.
Details About Pearson’s Performance
Pearson is leaning on furthering its generative artificial intelligence (AI) study tools after witnessing positive results in trials. The company plans to expand the current tests to several MyLab and Mastering titles by the fall semester. Notably, the Pearson+ program also exceeded the 1 million cumulative paid subscriptions milestone.
The company attributed the solid results to higher performance of the Assessment & Qualifications and English Language Learning segments, which grew 7% and 30% respectively. Moreover, Pearson’s cost-efficiency efforts led to £120 million of savings for the full year.
Importantly, the company’s financial position stands strong, with less than £0.8 billion in net debt. As of January 15, Pearson repurchased £206 million worth of shares as part of its targeted £300 million share buyback program. The company will release its detailed full-year results on March 1, 2024.
Is Pearson a Good Investment?
Ahead of Pearson’s Q4 trading update, Goldman Sachs analyst Lisa Yang lifted the price target on PSON stock to 1,319.00p (37.5% upside) from 1,225.00p yesterday and retained a Buy rating. Yang’s price target is currently the highest one for PSON stock on TipRanks.
Overall, PSON stock has a Strong Buy consensus rating on TipRanks backed by five Buys, three Holds, and one Sell rating. The Pearson PLC share price forecast of 1,072.11p implies 11.8% upside potential from current levels.
