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PSO $12.42

PSO target price
12.42
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Pearson plc
Type
Public limited company
Traded as LSE: PSON
NYSE: PSO
FTSE 100 Component
Industry Education
Founded 1844; 173 years ago (1844)
London, United Kingdom
Founder Samuel Pearson
Headquarters 80 Strand (Shell Mex House), London, United Kingdom
Key people
Sidney Taurel (Chairman)
John Fallon (CEO)
Products Publishing (books, newspapers, magazines)
Services Educational assessment
School management
Higher education
Revenue £4,552 million (2016)
Operating income
£(2,497) million (2016)
Net income
£(2,335) million (2016)
Website pearson.com

Pearson PLC is a British multinational publishing and education company headquartered in London. It was founded as a construction business in the 1840s. It shut down its construction activities in the 1920s and switched to publishing. It is the largest education company and the largest book publisher in the world. Pearson has a primary listing on the London Stock Exchange and is a constituent of the FTSE 100 Index. It has a secondary listing on the New York Stock Exchange in the form of American Depository Receipts.

The company was founded by Samuel Pearson in 1844 as a building and engineering concern operating in Yorkshire under the name S. Pearson & Son. In 1880, control passed to his grandson Weetman Dickinson Pearson, an engineer, who in 1890 moved the business to London and turned it into one of the world's largest construction companies. Another of its prominent engineers was Ernest William Moir who, after working for Pearson on tunnels in New York City, became the contractor's agent on construction of the Blackwall Tunnel under the River Thames in London between 1892 and 1897. The company also built the Admiralty Harbour at Dover, the Halifax Dry Dock in Canada, the East River Railway Tunnels in New York City, the Mexican Grand Canal that drained Mexico City, the Tehuantepec Railway in Mexico, and railways and harbours around the world. In November 1915, the firm began construction of HM Factory, Gretna, the largest cordite factory in the UK during World War I.

The construction business was shut down in the 1920s. Among its final projects was completion of the Sennar Dam, in Sudan, in 1925.

In 1919, the firm acquired a 45% stake in the London branch of merchant bankers Lazard Brothers, an interest which was increased to 80% in 1932 during the depression years. Pearson continued to hold a 50% stake until 1999. In 1921, Pearson purchased a number of local daily and weekly newspapers in the United Kingdom, which it combined to form the Westminster Press group.

In 1957, it bought the Financial Times and acquired a 50% stake in The Economist. It purchased the publisher Longman in 1968.

The company was first listed on the London Stock Exchange in 1969. It went on to buy paperback publisher Penguin in 1970, and in 1972, children's imprint Ladybird Books. In 1986, Pearson invested in the British Satellite Broadcasting consortium, which, a few years later merged with Sky TV to form a new company, British Sky Broadcasting (BSkyB).

During the 1990s, Pearson acquired a number of TV production and broadcasting assets (including former ITV franchisee Thames Television) and sold most of its non-media assets, under the leadership of future U.S. Congressman Bob Turner. Westminster Press was sold to Newsquest in 1996. Pearson acquired the education division of HarperCollins in 1996 from News Corporation and acquired book publishers Scott Foresman & Co. in 1996. In 1998 Pearson acquired Prentice Hall Textbooks/Simon & Schuster Trade Books from Viacom and merged it with its own education unit, Addison-Wesley Longman to form Pearson Education.

Pearson acquired Dorling Kindersley, the illustrated reference publisher and integrated it within Penguin, in March 2000 and then bought acquired National Computer Systems (NCS) in September 2000 so entering the educational assessment and school management systems market in the United States.

In 2002, Pearson sold its 22% stake in RTL Group for 1.5 billion Euros, and then purchased Rough Guides, the travel publisher, and brought it under Penguin. Pearson acquired Edexcel, a provider of qualifications in the UK, in 2003 and acquired about 80% stake in Meximerica Media Inc for $16.5 million for the swelling U.S. Hispanic market in 2004.

Pearson purchased a series of other testing and assessment businesses, including Knowledge Technologies in 2004, AGS in 2005, and National Evaluation Systems and Promissor in 2006. Pearson acquired National Evaluation Systems, a provider of customised state assessments for teacher certification in the US, in April 2006 and announced that it had agreed to acquire Harcourt Assessment and Harcourt Education International from Reed Elsevier for $950m in cash in May 2007. Pearson then completed the acquisition of Harcourt Assessment, merging the acquired businesses into Pearson Assessment & Information. Pearson also acquired eCollege, a digital learning technology group for $477m in May 2007.

In February 2008, Pearson announced the sale of its Pearson Data Management Division (formerly the scanner manufacturing and servicing division of NCS Inc.) to Scantron Corporation (part of M&F Worldwide) which had been its main competitor.

Pearson acquired Wall Street English for $145m in 2009 and bought the school learning systems division of Sistema Educacional Brasileiro (SEB) for $497m in 2010. Also in 2010, Pearson sold its 61% stake in Interactive Data to investment funds managed by Silver Lake Partners and Warburg Pincus for $2 billion.

In July 2011, Pearson announced the creation of Pearson College, a British degree provider based in London. Also in 2011, Pearson acquired Connections Education and agreed to sell its 50% stake in FTSE International Limited to the London Stock Exchange for £450 million. In 2011, Pearson also increased its stake in TutorVista, such that it had a 76% stake, for $127 million.

Pearson entered into talks with rival conglomerate Bertelsmann, over the possibility of combining their respective publishing companies, Penguin Group and Random House in October 2012. The houses are considered two of the "Big Six" publishing companies. On 29 October 2012, Pearson said it would merge Penguin Books with Bertelsmann's Random House to create the world's biggest consumer book publisher. Then in May 2012 Pearson announced its acquisition of GlobalEnglish Corporation, an American Business English software and solutions company, in an all-cash transaction.

In May 2013, Pearson announced a new restructuring plan to invest in digital learning and emerging markets, after predicting weaker earnings.

The change supports the decoupling of the Penguin consumer publishing business into a separate entity with Random House (forming Penguin Random House). The new structure combines the separate education companies, Pearson International and Pearson North America under one Pearson company. Pearson will organise around three global lines of business – School, Higher Education and Professional. The Financial Times Group and Pearson English will form part of Pearson Professional.

In July 2014, Pearson announced it had cut 4,000 jobs, representing 10% of the company's workforce.

Pearson announced on 23 July 2015 that it had agreed to sell the FT Group, which includes business daily Financial Times, to Japanese media group Nikkei for £844 million, or $1.32 billion. The sale does not include FT Group's London property at One Southwark Bridge. In August 2015, Pearson's sold its 50% stake in The Economist to the Agnelli family for £469 million who previously held 4.7% of the group. The remaining 50% of The Economist Group is owned by the Schroders, Cadburys and the Rothschilds.

On 5 November 2015, Pearson announced it was rebranding, including creating a new logo, with a "100% focus" on education.

On 3 July 2017, India-based education technology company, Byju's, acquired Tutor Vista and Edurite from Pearson. On 11 July 2017, Pearson agreed to reduce its holding in Penguin Random House to 25%, by selling a 22% stake in the business to Bertelsmann.

In August 2017 Pearson announced that it would cut 3,000 staff in an effort to save £300 million annually. On 16 August 2017 Pearson sold the language training subsidiary known as Global Education to Chinese company Puxin education for £62 million.

Pearson has two main streams of business:

Concerns exist around the amount of influence Pearson, a commercial company, has on public education. Other concerns are around tax avoidance, the high value contracts, and in one instance, laying off teachers to offset the high costs of testing. In 2017, more than six out of ten Pearson's shareholders voted against the chief executive's pay package of £1.5m after the company made a record loss.

Pearson owns Edexcel, an education and examination board. Edexcel has produced qualifications which link to Pearson texts, although Edexcel also continues to endorse textbooks published by other companies.

In June 2010, Pearson Plc received notification that the Libyan Investment Authority (LIA) founded by Muammar Gaddafi's son Saif al-Islam Gaddafi as a sovereign fund, had acquired 24,431,000 shares within the company via Euroclear. On further investigation, Pearson said the LIA may have acquired an additional 2,141,179 shares, resulting in a total interest of 26,572,179 shares. At the time, this represented a major holding of 3.27% within the company and the investment was worth around £280 million.

Pearson has been criticised for using offshore tax avoidance schemes involving a host of companies at a service address in Luxembourg.

Q reports

Period Date Adjusted Actuals EPS GAAP EPS
Q4 2019 2020-02-21 0.00 0.37
Q2 2019 2019-07-26 0.00 0.08
Q4 2018 2019-02-22 0.00 0.64

Ratings

2016-07-12 Upgrade Morgan Stanley Equal Weight to Overweight
2016-07-07 Downgrade Societe Generale Buy to Hold
2016-06-21 Reiterated Rating Shore Capital Hold
2016-06-21 Reiterated Rating JPMorgan Chase & Co. Neutral
2016-05-25 Reiterated Rating JPMorgan Chase & Co. Neutral
2016-05-25 Reiterated Rating Jefferies Group Buy
2016-05-20 Reiterated Rating Deutsche Bank Sell
2016-05-20 Reiterated Rating Deutsche Bank AG Sell
2016-05-14 Reiterated Rating Citigroup Inc. Buy
2016-05-05 Reiterated Rating Beaufort Securities Buy
2016-03-01 Downgrade Goldman Sachs Neutral to Sell
2016-03-01 Downgrade Goldman Sachs Group Inc. Neutral to Sell
2016-02-29 Reiterated Rating Beaufort Securities Buy
2016-02-29 Reiterated Rating Investec Buy
2016-02-22 Reiterated Rating JPMorgan Chase & Co. Neutral
2016-01-22 Reiterated Rating Investec Buy
2016-01-21 Upgrade Societe Generale Hold to Buy
2016-01-21 Upgrade Jefferies Group Underperform to Buy
2015-12-15 Upgrade BNP Paribas Neutral to Outperform
2015-11-02 Downgrade Charles Stanley Hold
2015-10-27 Downgrade Credit Suisse Outperform to Neutral
2015-10-27 Downgrade Credit Suisse Group AG Outperform to Neutral
2015-10-23 Downgrade BNP Paribas Outperform to Neutral
2015-10-22 Reiterated Rating Beaufort Securities Buy
2015-10-22 Downgrade JPMorgan Chase & Co. Overweight to Neutral
2015-10-22 Downgrade Bank of America Buy to Neutral
2015-10-22 Downgrade Bank of America Corp. Buy to Neutral
2015-10-20 Reiterated Rating Liberum Capital Sell
2015-10-01 Initiated Coverage Citigroup Inc. Buy
2015-09-16 Initiated Coverage JPMorgan Chase & Co. Overweight
2015-07-15 Downgrade Kepler Capital Markets Buy to Hold
2015-07-14 Downgrade Morgan Stanley Overweight to Equal Weight
2015-07-08 Downgrade Berenberg Bank Hold to Sell
2015-06-18 Downgrade Investec Hold to Reduce
2015-06-05 Upgrade Westhouse Securities Neutral
2015-05-27 Reiterated Rating Kepler Capital Markets Buy
2015-05-22 Reiterated Rating Natixis Buy
2015-05-20 Reiterated Rating Morgan Stanley Overweight
2015-05-20 Reiterated Rating Liberum Capital Sell
2015-05-19 Reiterated Rating JPMorgan Chase & Co. Neutral
2015-05-19 Reiterated Rating Beaufort Securities Buy
2015-05-06 Reiterated Rating Barclays Equal Weight
2015-05-06 Reiterated Rating Barclays PLC Equal Weight
2015-04-30 Reiterated Rating Westhouse Securities Sell
2015-04-27 Reiterated Rating Deutsche Bank Sell
2015-04-27 Reiterated Rating Barclays Equal Weight
2015-04-24 Reiterated Rating Investec Hold
2015-04-24 Downgrade Numis Securities Ltd Hold to Reduce
2015-04-20 Reiterated Rating Westhouse Securities Sell
2015-04-14 Reiterated Rating Liberum Capital Sell
2015-04-13 Downgrade Jefferies Group Buy to Underperform
2015-04-10 Reiterated Rating BNP Paribas Outperform
2015-04-08 Reiterated Rating Westhouse Securities Sell
2015-04-02 Reiterated Rating Credit Suisse Outperform
2015-03-02 Upgrade Nomura Reduce to Neutral
2015-03-02 Upgrade Nomura Holdings Inc. Reduce to Neutral
2015-02-27 Reiterated Rating Numis Securities Ltd Hold
2015-02-27 Reiterated Rating Liberum Capital Sell
2015-02-27 Reiterated Rating Investec Hold
2015-02-20 Reiterated Rating Westhouse Securities Sell
2015-02-19 Reiterated Rating Numis Securities Ltd Hold
2015-02-11 Reiterated Rating Westhouse Securities Sell
2015-02-06 Reiterated Rating Liberum Capital Sell
2015-02-03 Reiterated Rating Credit Suisse Outperform
2015-01-28 Reiterated Rating Kepler Capital Markets Buy
2015-01-22 Reiterated Rating Berenberg Bank Hold
2015-01-21 Reiterated Rating Liberum Capital Sell
2015-01-21 Reiterated Rating Investec Hold
2015-01-19 Reiterated Rating Westhouse Securities Sell
2015-01-16 Reiterated Rating Panmure Gordon Hold
2015-01-14 Upgrade Goldman Sachs Sell to Neutral
2015-01-13 Reiterated Rating Investec Hold
2015-01-05 Reiterated Rating Societe Generale Hold
2014-12-17 Reiterated Rating Liberum Capital Sell
2014-12-12 Reiterated Rating Kepler Capital Markets Buy
2014-11-19 Reiterated Rating Societe Generale Hold
2014-10-24 Reiterated Rating Numis Securities Ltd Hold
2014-10-24 Reiterated Rating Investec Hold
2014-10-22 Reiterated Rating Westhouse Securities Sell
2014-10-22 Reiterated Rating Liberum Capital Sell
2014-10-14 Reiterated Rating Westhouse Securities Sell
2014-10-10 Reiterated Rating Liberum Capital Sell
2014-09-29 Initiated Coverage Westhouse Securities Sell
2014-09-29 Upgrade Macquarie Underperform to Outperform
2014-09-23 Upgrade Kepler Capital Markets Reduce to Buy
2014-09-16 Upgrade Morgan Stanley Equal Weight to Overweight
2014-09-03 Reiterated Rating Credit Suisse Outperform
2014-07-28 Reiterated Rating Beaufort Securities Hold
2014-07-28 Reiterated Rating Barclays Equal Weight
2014-07-25 Reiterated Rating Numis Securities Ltd Hold
2014-07-25 Reiterated Rating Investec Hold
2014-07-21 Reiterated Rating Nomura Reduce
2014-07-17 Reiterated Rating BNP Paribas Outperform
2014-07-14 Reiterated Rating Investec Hold
2014-07-04 Reiterated Rating BNP Paribas Outperform
2014-06-25 Reiterated Rating Goldman Sachs Sell
2014-06-24 Reiterated Rating Societe Generale Hold
2014-06-23 Upgrade Morgan Stanley Underweight to Equal Weight
2014-06-20 Reiterated Rating Liberum Capital Sell
2014-06-11 Downgrade Goldman Sachs Neutral to Sell
2014-05-06 Reiterated Rating Credit Suisse Outperform
2014-04-28 Reiterated Rating Deutsche Bank Sell
2014-04-28 Reiterated Rating Berenberg Bank Hold
2014-04-25 Reiterated Rating Numis Securities Ltd Hold
2014-04-25 Reiterated Rating Liberum Capital Sell
2014-04-25 Reiterated Rating Investec Hold
2014-04-25 Reiterated Rating Credit Suisse Outperform
2014-04-24 Reiterated Rating Citigroup Inc. Buy
2014-04-17 Reiterated Rating Deutsche Bank Sell
2014-04-04 Upgrade Jefferies Group Hold to Buy
2014-01-27 Upgrade Citigroup Inc. Neutral to Buy
2014-01-27 Downgrade JPMorgan Chase & Co. Overweight to Neutral
2013-11-20 Upgrade Bank of America Neutral to Buy
2013-11-05 Downgrade Goldman Sachs Buy to Neutral
2013-10-18 Upgrade Kepler Capital Markets Reduce to Hold
2013-10-15 Upgrade Societe Generale Sell to Hold
2010-05-04 Initiated HSBC Securities Underweight
2010-03-02 Upgrade Deutsche Bank Sell to Hold
2009-12-02 Initiated Jefferies & Co Buy
2009-11-25 Initiated Barclays Capital Underweight
2009-07-10 Upgrade Credit Suisse Neutral to Outperform
2009-01-26 Upgrade JP Morgan Underweight to Neutral
2008-11-14 Upgrade Credit Suisse Underperform to Neutral
2008-09-10 Downgrade Lehman Brothers Equal-Weight to Underweight
2008-07-14 Downgrade Deutsche Securities Hold to Sell
2008-06-03 Initiated JP Morgan Underweight
2008-03-12 Upgrade Lehman Brothers Underweight to Equal-weight
2007-08-22 Downgrade Deutsche Securities Buy to Hold
2007-07-16 Upgrade Bear Stearns Underperform to Peer Perform
2007-06-25 Upgrade Stifel Nicolaus Hold to Buy $20
2007-04-03 Downgrade Stifel Nicolaus Buy to Hold
2016-07-12 Upgrade Morgan Stanley Equal Weight to Overweight
2016-07-07 Downgrade Societe Generale Buy to Hold
2016-06-21 Reiterated Rating Shore Capital Hold
2016-06-21 Reiterated Rating JPMorgan Chase & Co. Neutral
2016-05-25 Reiterated Rating JPMorgan Chase & Co. Neutral

There is presents forecasts of rating agencies and recommendations for investors about this ticker

Major Shareholders

Name Relationship Total Shares Holding stocks