Sees Adjusted Operating Profit of GBP 640M-GBP 685M by End of 2025
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 3 days ago
0mins
Should l Buy PSO?
Sees mid-single digit underlying sales growth, adjusted operating profit of GBP 640M-GBP 685M at FX rates as at the end of 2025, including the impact of the 2025 product development impairment, and free cash flow conversion of 90%-100%.
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Analyst Views on PSO
About PSO
Pearson PLC is a learning company with its principal operations in the education, assessment and certifications markets. The Company’s divisions include Assessment & Qualifications, Virtual Learning, Higher Education, English Language Learning and Enterprise Learning & Skills. The Assessment & Qualifications division includes Pearson VUE, US Student Assessment, Clinical Assessment, UK-curriculum-based qualifications, such as GCSEs and A levels, as well as courseware for English-speaking regions throughout the world. The Virtual Learning division includes virtual schools and online program management. The Higher Education includes the United States, Canadian, and International Higher Education Courseware businesses. The English Language Learning division includes Pearson Test of English, Institutional Courseware and English Online Solutions. The Enterprise Learning & Skills division includes Vocational Qualifications and Enterprise Solutions.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Market Reaction Anticipation: Investors are eagerly awaiting these earnings, particularly in the current economic climate, where the results could significantly influence the short-term performance of the respective stocks.
- Industry Dynamics Analysis: As a key player in the energy sector, Hawaiian Electric's earnings will reflect the impact of energy demand and price fluctuations on its profitability, providing insights into the sector's health.
- Global Market Focus: The performance of Pearson and SQM will be closely monitored by global markets, especially against the backdrop of changing demands in education and mining resources.
See More
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- Executive Change: Pearson has appointed Simon Robson as Group CFO, succeeding Sally Johnson, who will leave the company on March 30, 2026, with Robson officially taking over on May 8, 2026, indicating a strategic transition in leadership.
- Growth Expectations: The company anticipates mid-single digit underlying sales growth for 2026, reflecting positive momentum as it enters the new fiscal year, despite facing market challenges.
- Reaffirmed Outlook: Pearson reaffirmed its medium-term outlook as outlined in its full-year results announced on February 27, 2026, indicating management's confidence in future performance, even as shares fell 4% premarket.
- Market Reaction: Pearson's shares dropped 4% in premarket trading, reflecting market caution regarding the executive transition and future growth expectations, which may impact investor confidence.
See More
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- Strong Financial Performance: Pearson's FY 2024 adjusted earnings per share rose by 4% to 64.5p, indicating sustained improvement in revenue and profitability, despite a modest revenue increase of 0.8% to £3.58 billion.
- Profitability Enhancement: The group reported an adjusted operating profit of £614 million, up 6% year-over-year, with operating margin expanding from 16.9% to 17.2%, reflecting successful cost control and operational efficiency initiatives.
- Robust Cash Flow: Free cash flow increased by 8%, achieving a conversion rate of 125%, demonstrating strong cash flow management amid high sales growth, thereby enhancing flexibility for future investments.
- Positive Future Outlook: The company maintains an optimistic outlook for 2026, projecting mid-single-digit underlying sales growth and adjusted operating profit between £640 million and £685 million, showcasing confidence in future market demand.
See More
Pearson Reports Lower Profit for FY2025 but Positive Outlook for FY2026
- Financial Performance: Pearson's profit before tax for FY2025 fell to £457 million from £510 million last year, despite a 1% increase in sales to £3.577 billion, indicating a conflict between sales growth and declining profits.
- Earnings Per Share: Profit attributable to equity holders was £335 million, translating to 50.7 pence per share, down from £434 million and 63.5 pence per share last year, reflecting pressure on the company's profitability.
- Dividend Increase: The firm proposed a final dividend of 17.4 pence per share, up from 16.6 pence last year, resulting in a total annual dividend of 25.2 pence, a 5% increase compared to 2024, demonstrating a commitment to shareholder returns.
- Future Outlook: For FY2026, Pearson projects mid-single digit underlying sales growth and adjusted operating profit between £640 million and £685 million, indicating confidence in future growth and strategic planning.
See More
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- Earnings Announcement Date: Pearson (PSO) is set to release its FY earnings report on February 27 after market close, with consensus EPS estimate at $0.84 and revenue estimate at $4.87 billion, indicating investor interest in the company's future performance.
- EPS Estimate Changes: Over the past three months, EPS estimates have seen one upward revision with no downward adjustments, reflecting analysts' confidence in the company's profitability, which could positively impact stock prices.
- Revenue Estimate Dynamics: Revenue estimates have experienced six upward revisions and one downward revision, suggesting a generally optimistic market outlook on Pearson's revenue growth, potentially boosting investor confidence and driving stock price increases.
- Market Reaction Analysis: Despite Pearson's solid business performance, the market may be pricing the stock too optimistically, prompting investors to closely monitor the upcoming earnings report to assess the gap between actual performance and market expectations.
See More
Activist Investors Target Appian, Pearson, and Other Stocks
Increased Investments: There has been a notable rise in holdings across various sectors, indicating a growing confidence among investors.
Market Trends: The increase in holdings reflects broader market trends, suggesting potential economic recovery and stability.
See More
