Pearson: Solid Near-Term Outlook but Limited Upside Leaves Shares Fairly Valued at Hold

In a report released today, David Amiras from Bank of America Securities maintained a Hold rating on Pearson, with a price target of p1,170.00.

David Amiras has given his Hold rating due to a combination of factors related to Pearson’s recent performance and valuation. The company’s latest trading update showed that revenue growth and operating profit for FY25 are largely aligned with market expectations, and management reaffirmed its medium‑term growth outlook. However, the loss of a US Student Assessment contract introduces a modest headwind to 2026 revenue, and growth is not uniformly strong across all divisions, with weaker trends in English Language Learning and Enterprise Learning tempering the overall picture.

At the same time, Pearson’s share price has fallen over the past year despite some recent recovery, while the stock now trades at a forward earnings multiple that is broadly in line with both sector peers and its own five‑year average. This suggests limited upside purely from re‑rating, especially without clearer evidence of an acceleration in growth beyond 2025. Because the near‑term outlook is solid but not compelling and longer‑term growth visibility into 2026 remains uncertain pending fuller guidance, Amiras concludes that the shares are fairly valued at present and thus merits a Neutral (Hold) stance rather than a more decisive Buy or Sell recommendation.