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Investing.com - CFRA has lowered its price target on Pearson PLC (NYSE:PSO) to $16.00 from $17.00 while maintaining a Hold rating on the stock. The education company, currently trading at $14.44, shows strong fundamentals with a perfect Piotroski Score of 9, according to InvestingPro data.
The research firm based the new target on a 2025 price-to-earnings ratio of 18.5x, which sits above Pearson’s five-year average forward P/E of 17.4x. The stock currently trades at a P/E of 16.35x with a notably low PEG ratio of 0.52, suggesting potential undervaluation relative to its growth prospects. CFRA justified the premium multiple by citing the company’s medium-term earnings resilience.
Pearson recently reaffirmed its 2025 guidance, indicating expectations for a stronger second half of the year, particularly in the fourth quarter. CFRA interpreted this reaffirmation as a sign of management confidence despite ongoing foreign exchange volatility.
The education company continues to target mid-single-digit sales growth CAGR and sustained margin expansion over the medium term. CFRA views this as a credible roadmap supported by Pearson’s evolving digital platform.
Despite these positive factors, CFRA noted challenges including a 3% decline in the English language learning segment during the first half of 2025, with the Pearson Test of English expected to decline further in the second half of the year.
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