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Investing.com -- McGraw Hill, the educational publishing and solutions company that recently went public, drew a flurry of new analyst initiations on Monday, with Wall Street opinions split between cautious and optimistic.
UBS struck a neutral tone, starting coverage with a $15 price target. “Initiating at Neutral,” said the bank. “In order to deliver targeted 5%+ revenue growth over time, we think share gains and execution are needed in this tougher market.” The analysts pointed to demographic and policy headwinds, along with lingering questions over AI substitution.
Goldman Sachs was more bullish, initiating with a Buy rating and a $27 target. The bank cited the company’s digital transformation, noting that digital revenue mix has risen from 35% in 2015 to 65% today. “We believe [the digital transformation] will further increase customer stickiness and revenue visibility as a captive ecosystem for course content powered by AI is created,” Goldman wrote.
JPMorgan also started MH at Overweight with a $21 target, calling McGraw Hill “a class leader in education” with strong recurring revenue and room for re-rating.
BMO Capital echoed that optimism, starting the stock at Outperform with a $24 target, describing McGraw Hill as undergoing “a textbook transformation” despite near-term K-12 adoption cycle headwinds.
Baird launched with an Outperform rating and a $21 target, citing attractive valuation and “incumbency advantages” in a stable, high-margin market.
Stifel rounded out coverage with a Buy rating and $19 target, calling McGraw Hill “a recession-resistant business” with potential for margin improvement and leverage reduction post-IPO.
Taken together, the initiations suggest a broadly positive view of McGraw Hill’s digital pivot, though UBS’s cautious stance highlights the execution risks in a competitive and cyclical education market.