Pearson plc provides learning materials, technologies, assessments, and services for teachers and students worldwide. The company is also a global leader in computer-based testing for high-stakes certification and licensure exams in the healthcare, finance, information technology, academic and admissions markets. The company was founded in 1844 and is based in London, United Kingdom.
PSO Price Forecast Based on DCF Valuation
DCF Fair Value Target:
The table below illustrates the output of a discounted cash flow forecast using a variety of scenarios for Pearson Plc. To summarize, we found that Pearson Plc ranked in the 31th percentile in terms of potential gain offered. Our DCF analysis suggests the stock is overvalued by about 58.83%. The most interesting components of our discounted cash flow analysis for Pearson Plc ended up being:
Its compound free cash flow growth rate, as measured over the past 4.03 years, is 0% -- higher than merely 24.29% of stocks in our DCF forecasting set.
Pearson Plc's effective tax rate, as measured by taxes paid relative to net income, is at 0 -- greater than only 0% of US stocks with positive free cash flow.
The weighted average cost of capital for the company is 8. This value is greater than merely 21.97% stocks in the Consumer Cyclical sector that generate free cash flow.
Terminal Growth Rate in Free Cash Flow
Return Relative to Current Share Price
CPRI, FLWS, DAN, JW.A, and SEE can be thought of as valuation peers to PSO, in the sense that they are in the Consumer Cyclical sector and have a similar price forecast based on DCF valuation.
Pearson (PSO) FY20 sales declined by 10% Y/Y and expects adjusted operating profit in the range of £310M-£315M amid portfolio changes, inflation and the trading impact of COVID-19 partially offset by restructuring savings.Segment breakdown: COVID-19 impacted International (down 19%) and Global Assessment sales (down 14%) due to test centre and school...
UK's FTSE 100 rose on Wednesday as miners gained after a strong production forecast from BHP Group, while encouraging updates from luxury brand Burberry and education group Pearson drove optimism about the earnings season. BHP Group Ltd climbed 2.8% after it forecast record iron ore production for fiscal 2021, helped by high prices for the commodity.
The Pearson share price has just leapt to 16-month highs! Here's why the FTSE 100 giant has rocketed following fresh trading numbers. The post This is why FTSE 100 stock Pearson’s share price is rocketing! appeared first on The Motley Fool UK .