Completely agree with Anton. There is obviously very poor visibility of earnings here and to be honest it just invited all the Bulls at once today because there wasn't much cheer pre draghi. If anything today's tise has created a stonking short. A bad night in Asia tonight and this sinks tomorrow.
I take it that you're not a shareholder here? The market obviously likes what it hears in the trading statement and sees it as a good recovery stock, as a result of the SP now being up over 18% Don't you just wish that you'd bought in at the recent lows!
Massive job cuts take place when the company is in trouble. It is the only way to retain profitability at previous levels. It's not growing its revenues. It's trying to maintain profits and dividends through cost cutting measures. 10% job reductions are massive. It's a sign to company is in desperate trouble. It also sold much of its brand power with the disposal of FT and the Economist. It's getting smaller and smaller as a company. It's American arm is struggling. There are significant worries Pearson's study material is/are not adequate. In fact, you can self learn better with resources available freely online than you can with Pearson's books and what have you. There are worries in the US that Pearson tests and assessments is creating a generation of school kids not adequately qualified. There is possibility the public bodies, with proper regulation, might be asked to create test materials in the future. This is a company fraught with danger for anyone wanting to invest in it.
So a completely disastrous couple of weeks and update out tomorrow.
They said that eps would be circa 70p and next year ie this year around 65p
My guess is that this will be met and dividend will be maintained or even slightly increased - not 7% but maybe 1 or 2 % /
My opinion is that this share is worth at least 9 pounds on current earnings/ market conditions and potentially 50% more IF they can deliver The transition to digital - we shall see and I could be proved entirely wrong in a few hours ( at least re earnings/ divi) but thought I'd put it out there !!
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