Toni Kaplan, an analyst from Morgan Stanley, has initiated a new Buy rating on McGraw Hill, Inc. (MH).
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Toni Kaplan has given his Buy rating due to a combination of factors that highlight McGraw Hill’s strong market position and growth potential. The company is a leading provider in the education content sector, operating in a substantial $30 billion market. Its significant scale allows McGraw Hill to invest heavily in technology and content, outpacing smaller competitors and capturing market share.
Kaplan notes that McGraw Hill’s valuation is attractive, trading at a discount compared to its closest peer, PSON-LN. The stock is priced at 8 times the projected 2026 adjusted EBITDA, which is lower than PSON-LN’s 10 times. Furthermore, McGraw Hill’s digital initiatives and technological advancements, such as personalized learning solutions, position it well for future growth. Despite some revenue volatility due to the cyclical K-12 adoption market, the potential for customer expansion and retention through new platforms and cross-selling opportunities supports the Buy rating.
Kaplan covers the Industrials sector, focusing on stocks such as Equifax, Waste Management, and ARAMARK Holdings. According to TipRanks, Kaplan has an average return of 2.3% and a 57.01% success rate on recommended stocks.
In another report released today, BMO Capital also initiated coverage with a Buy rating on the stock with a $24.00 price target.