McGraw Hill stock initiated with Neutral rating at UBS, $15 price target

Published 18/08/2025, 08:14
McGraw Hill stock initiated with Neutral rating at UBS, $15 price target

Investing.com - UBS initiated coverage on McGraw Hill (NYSE:MH) with a Neutral rating and a $15.00 price target on Monday, representing about 12% upside from the current price of $13.35. According to InvestingPro data, the stock is trading near its 52-week low of $12.55.

The research firm cited the need for market share gains and strong execution in what it describes as a "tougher market" with demographic and policy headwinds for the educational publisher. Despite these challenges, McGraw Hill maintains impressive gross profit margins of 80% and has achieved revenue growth of 6.65% over the last twelve months.

UBS noted that McGraw Hill faces lingering questions about substitution and artificial intelligence impacts on its business, though it acknowledged some encouraging evidence of share gains in recent years.

The firm pointed out that growth in McGraw Hill’s business is "inherently lumpy" due to K-12 adoption cycles, with fiscal 2026 expected to be a down year for the company.

UBS concluded that the near-term risk/reward for McGraw Hill appears balanced, particularly considering its status as a newly public entity.

In other recent news, McGraw Hill reported first-quarter fiscal 2026 results that exceeded revenue expectations, with total revenue reaching $535.7 million. This marks a 2.4% increase compared to the previous year, driven by significant growth in digital and recurring revenue streams. JPMorgan has initiated coverage on McGraw Hill with an Overweight rating and set a price target of $21. The firm recognized McGraw Hill’s transformation into a primarily digital publishing business. Similarly, Goldman Sachs has started coverage with a Buy rating and a price target of $27. Goldman Sachs noted the company’s digital revenue growth, which has risen from 35% in fiscal 2015 to around 65% currently, with projections to exceed 75% in the long term. These developments highlight McGraw Hill’s ongoing digital transformation and its impact on financial performance.

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