Deutsche Bank initiates McGraw Hill stock with Buy rating on AI potential

Published 18/08/2025, 09:08
Deutsche Bank initiates McGraw Hill stock with Buy rating on AI potential

Investing.com - Deutsche Bank initiated coverage on McGraw Hill (NYSE:MH) with a Buy rating and set a price target of $18.00 on Monday, representing significant upside from the current price of $13.35. According to InvestingPro data, the stock is trading near its 52-week low of $12.55, following a 21.47% decline over the past six months.

The bank views McGraw Hill as a leading global provider of information solutions across K-12, higher education, and professional learning sectors.

Deutsche Bank believes the company is strategically positioned to leverage artificial intelligence capabilities, as its content, data-driven insights, and learning science help deliver personalized learning experiences and drive positive outcomes.

The bank notes that in an era where AI-generated generic content raises quality concerns, McGraw Hill stands out as a trusted provider of educational solutions.

Despite acknowledging that revenue recognition can be lumpy, Deutsche Bank finds the valuation compelling at current levels, highlighting a calendar year 2026 free cash flow yield exceeding 10%, with expectations that top-line growth and free cash flow will improve over time, supported by deleveraging.

In other recent news, McGraw Hill has seen a flurry of analyst activity, with multiple firms initiating coverage on the company’s stock. BMO Capital started coverage with an Outperform rating and set a price target of $24.00, recognizing McGraw Hill’s leadership in educational solutions from preK-12 to higher education. Stifel also initiated coverage, giving a Buy rating and a $19.00 price target, highlighting the company’s successful transition to a digital platform-based business model. Baird joined the list of firms with an Outperform rating, setting a $21.00 price target, and noted the company’s attractive valuation based on future earnings projections.

Meanwhile, UBS initiated coverage with a Neutral rating and a $15.00 price target, pointing out the challenges McGraw Hill faces in gaining market share and executing strongly in a challenging market environment. Lastly, JPMorgan gave an Overweight rating with a $21.00 price target, emphasizing McGraw Hill’s position as a leading provider of education solutions and its shift towards digital publishing. These recent developments reflect varying analyst perspectives on McGraw Hill’s market position and future prospects.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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