Luke Holbrook, an analyst from Morgan Stanley, maintained the Hold rating on Pearson. The associated price target is p1,170.00.
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Luke Holbrook has given his Hold rating due to a combination of factors surrounding Pearson’s recent performance and future projections. The company’s Q3 results showed a 4% year-over-year increase in revenue, which was positively received by the market. However, there is still a significant challenge ahead as Pearson needs to achieve a 7-8% revenue increase in Q4 to meet its full-year guidance. This requirement introduces a level of uncertainty, despite the company’s confidence in its internal visibility on contracts.
Additionally, while certain segments like Virtual Schools and Assessments & Qualifications have shown robust growth, other areas such as Higher Education and Enterprise Learning have experienced some softness. This mixed performance across segments contributes to the cautious outlook. Furthermore, although Pearson has reiterated its guidance for 2025, the slight adjustment in revenue growth expectations from 4.4% to 4% suggests a more conservative approach. These factors combined lead to a Hold rating, reflecting a balanced view of potential risks and opportunities.
In another report released yesterday, Bank of America Securities also reiterated a Hold rating on the stock with a p1,120.00 price target.
Based on the recent corporate insider activity of 34 insiders, corporate insider sentiment is positive on the stock. This means that over the past quarter there has been an increase of insiders buying their shares of PSON in relation to earlier this year.