Pearson plc ADR Dossier - Source-backed chat

Pearson plc ADR

PSONLondon Stock Exchange

SectorCommunication Services

IndustryPublishing

Beta (adjusted)0.31

Intrinsic Value $15.37median of 6 methods · middle span $14-$36based on filings through 31 Dec 2025

Market Price $16.16Price as of 1 Oct 2026

Near fair valueIntrinsic value is 5% below the market price

−50% · IV below pricenear fair value ±15%IV above price · +50%

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Market Cap $9.7B

Enterprise Value $10.9B

Shares Outstanding 651.3M diluted

Moat Rating Narrow

Next Earnings Date16 Oct 2026

Last ex-dividend14 Aug 2026

All prices and values are periodic snapshots, not live quotes. Source dates are shown for reference.

Thesis

Street consensus, scenarios, merits, risks, and invalidation triggers

AI-assisted

Thesis Summary

Pearson entered the second half of 2026 with 4% underlying Group revenue growth, 14% underlying adjusted operating-profit growth, a 15.5% adjusted operating margin and £259m of first-half free cash flow. Management reiterated its full-year guidance, while Virtual Learning enrolment growth and Inclusive Access adoption provide evidence of digital momentum. The balanced stance reflects weaker Pearson Test of English volumes, a difficult near-term English Language Learning market and execution risk around converting first-half momentum into the full-year profit and cash targets.

This section is the 12-month view: analyst targets and the probability-weighted scenarios built from them. The intrinsic value at the top of this page answers a different question: what the business is worth today.

Street view · analyst 12-month targets2 analysts · as of 18 Aug 2026

Low · most bearish analyst$14.00

Mean target$15.70

High · most bullish analyst$17.40

Our research · scenarios, merits, risks, and invalidation triggersResearch as of 2 Sep 2026

Scenarios · 12-month scenario targetsAnchored at research date

Bear CaseDownside scenario

$14.0017%

Adjusted operating profit falls below £640m or cash conversion falls below 90% as PTE weakness persists, English Language Learning does not recover in Q4, and delivery or mix pressure offsets growth in Virtual Learning and digital courseware.

Base CaseCentral scenario

$15.7058%

Matches the consensus mean

Pearson delivers mid-single-digit underlying revenue growth, adjusted operating profit within the £640m-£685m range and 90%-100% free-cash-flow conversion. Virtual Learning and digital-courseware momentum offset near-term PTE weakness.

Bull CaseUpside scenario

$17.4025%

Pearson reaches the upper portion of its £640m-£685m adjusted operating-profit guidance as Virtual Learning enrolment momentum, Inclusive Access adoption and operating leverage persist, while English Language Learning returns to growth in Q4 and medium-term margin improvement remains on track.

Scenarios are anchored to street consensus at the research date, with our probabilities and rationale.

Key Investment Merits

First-half underlying Group revenue increased 4%, adjusted operating profit increased 14% and adjusted margin expanded to 15.5%.
Virtual Learning enrolment growth accelerated to 15%, while Inclusive Access reached 50% of core US Courseware.
First-half free cash flow increased to £259m, and management reiterated 90%-100% full-year free-cash-flow conversion guidance.
Pearson's medium-term outlook calls for mid-single-digit underlying revenue CAGR and average annual margin improvement of 40 basis points.

Key Investment Risks

Pearson Test of English volumes declined 3%, and management expects difficult market conditions to persist near term.
English Language Learning declined 3% on an underlying basis and is not expected to return to growth until Q4 2026.
Assessment & Qualifications adjusted operating profit declined 6% underlying amid adverse mix and one-time delivery costs.
Pearson identifies accreditation, artificial intelligence, content and channel disruption, execution capability, competition and customer expectations among its principal risks.

All scenarios are estimates and subject to change. Past performance is not indicative of future results.

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Explore this dossier

ValuationIntrinsic value, the six-method breakdown, peer medians, and your assumptions sandbox.Financial SnapshotRevenue, profitability, returns, balance sheet, dividends, and the filing-level detail.Qualitative AnalysisBusiness overview, strategic initiatives, and mergers, acquisitions & partnerships.Outlook & Key DatesForward estimates, reporting calendar, and the monitoring framework.