McGraw Hill, Inc., the Consumer Defensive sector company, was revisited by a Wall Street analyst on September 12. Analyst Jeffrey Silber from BMO Capital maintained a Buy rating on the stock and has a $25.00 price target.
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Jeffrey Silber has given his Buy rating due to a combination of factors that highlight McGraw Hill, Inc.’s strong market position and growth potential. The company has successfully gained market share in the K-12 sector, with significant improvements in both core and supplemental areas, driven by innovative products like ALEKS and Achieve3000. Additionally, McGraw Hill is well-positioned in the higher education market, with management expressing optimism about enrollment trends and the continued success of the Evergreen flywheel strategy.
Furthermore, McGraw Hill is targeting impressive adjusted EBITDA margins in the medium to long term, facilitated by a strategic shift from print to digital and the effective use of fixed costs. The company is also leveraging AI to enhance operational efficiencies, which could offer additional upside. Despite concerns about recent AI developments, management believes that their AI solutions will enhance educational efficiency rather than disrupt their offerings. Overall, McGraw Hill’s strong market presence, strategic initiatives, and growth prospects underpin Jeffrey Silber’s Buy rating.