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Investing.com - Morgan Stanley initiated coverage on McGraw Hill (NYSE:MH) with an Overweight rating and a $20.00 price target, representing approximately 50% upside potential from the current price of $13.35, which sits near its 52-week low of $12.55.
The investment bank cited McGraw Hill’s position as a leading provider of education content and solutions across K-12, higher education, and professional education segments, operating in a $30 billion market for education content. The company maintains impressive gross profit margins of 80% and achieved 6.65% revenue growth in the last twelve months.
Morgan Stanley highlighted the company’s leading scale as a competitive advantage, noting it allows McGraw Hill to outspend smaller providers on technology and content while covering more territories.
The firm pointed to McGraw Hill’s recent market share gains and believes continued share expansion will be the key driver for the stock going forward.
Morgan Stanley considers the stock attractively priced at 8x CY’26 adjusted EBITDA (post-SBC and post-plate), which sits below competitor Pearson’s valuation of 10x.
In other recent news, McGraw Hill has garnered significant attention from several financial institutions. Rothschild Redburn initiated coverage with a Buy rating, highlighting a price target of $28.60, which suggests a notable upside potential. Deutsche Bank also initiated McGraw Hill with a Buy rating, setting a price target of $18.00, citing the company’s potential in leveraging AI. BMO Capital joined the trend by rating McGraw Hill as Outperform, with a price target of $24.00, recognizing its leadership in educational solutions. Stifel added to the positive sentiment, giving a Buy rating with a $19.00 price target, noting McGraw Hill’s successful transition to a digital platform. Baird also initiated coverage with an Outperform rating, setting a price target of $21.00, and pointed out the attractive valuation based on future earnings estimates. These developments underscore the growing confidence in McGraw Hill’s strategic direction and market position.
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