Market's view on Pearson
Published on April 2024
- A positive trading update highlighted strong operational progress, with AI integration in over 40 Higher Education titles and successful share buyback programs.
- Despite positive future promises and a belief in the products, concerns about the current stock price being too conservative for a growth company like Pearson.
- Questions raised about the impact of AI on Pearson’s traditional business models, including the potential redundancy of Pearson in exams and assessments due to AI advancements.
- Doubts expressed regarding the rapid development of AI and its unpredictable effects on Pearson’s business.
- Financial results show a 5% growth in underlying Group sales and a significant profit increase, with an optimistic outlook for 2024 and 2025.
- Increase in foreign student applications indicates a rise in participants for Pearson English programs.
- Barclays revised Pearson’s price target slightly lower, though maintaining an ‘equal weight’ rating.
- Uncertainty about a specific sharp drop in Pearson’s stock price compared to a rising FTSE100, questioning the reasons behind the disparity.