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Pearson: Fair Value But Not Cheap Enough To Tempt Me

Jan. 06, 2022 4:48 AM ETPearson plc (PSO)3 Comments
Retirement Pot profile picture
Retirement Pot


  • Pearson is well-positioned for changing educational, training and assessment needs. That should help it grow.
  • Its share price fall means I now see it as fairly priced.
  • There is a decent dividend and some potential for share price increase in the coming year in my view.
  • But I still don't think it's cheap and execution risk remains, with recent results being a mixed bag. So I remain neutral.
Teenage girl with headphones and laptop having online school class at home

Phynart Studio/E+ via Getty Images

Education provider Pearson (NYSE:PSO) has had a challenging few years and its share price has continued to decline lately. I like the company’s investment case and see the potential for some share price recovery. But I regard it as okay value, not

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Retirement Pot profile picture
I am a private investor based in the United Kingdom and most interested in equities in the U.K., U.S., Canada and Norway.

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Comments (3)

bazooooka profile picture
Seemed fair value at eight; might not get it single digits again.
BetterPhil profile picture
The digital first offering strategy is rolling out too slow in my view, and the paid take-up of the Pearson+ app demonstrates this - I'd like to see the paid user conversion rate higher than c. 5%, or at least on the increase. The company acknowledges well the growth areas in their sector, but my concern is that the building blocks are not in place to be the market leader in the coming years. The Feb report should be interesting but I think there will be a reset in 2022 guidance and expectations. Thanks for the article.
Once key aspect of PSO is they essentially have a monopoly on mental health assessments. When COVID hit, there was a huge compression in the volume of these diagnostics. On the back end of covid, there is a clear uptrend in mental health symptoms on a mass scale. This explains flat revs in this domain, and potential for low double digit growth. This is my opinion as a clinical psychologist in the US.
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