Pearson rallies on Exane upgrade to 'outperform'

Pearson rallied on Thursday as Exane BNP Paribas upgraded its stance on shares of the education publisher to ‘outperform’ and hiked the price target to 950p from 700p.

Exane said it reckons Pearson will succeed in scaling its up direct-to-consumer and D2C educational tech revenues as it progresses in its asset reshuffling.

"This should accelerate its top line growth and drive margin expansion," Exane said. "While not quite the Amazon of education, we believe Pearson Ed Tech assets deserve a re-rating."

As such, Exane said it has updated its sum-of-the-parts price target to reflect the valuation upside in these assets.

"Despite the recent share price rally as the market prices in the strategic reshuffling, we think further upside can be had once management increases disclosure on D2C revenue trends."

At 1315 BST, the shares were up 2.9% at 830.60p.