Broker tips: Pearson, Lonmin

(ShareCast News) - Education group Pearson was under the cosh for the second day in a row as JPMorgan Cazenove downgraded the stock to 'neutral' from 'overweight' and slashed the price target to 1,080p from 1,365p following the company's interim management statement on Wednesday.JPM attributed the downgrade to weaker industry trends and low visibility in trends.It said the announcement on Wednesday highlighted three incremental concerns: lower-than-expected US community college enrolments, higher returns from US book retailers and lower-than-expected textbook sales in South Africa.The bank cut its 2015 earnings per share estimate to 70p from 73.6p and its 2015 estimate to 63.3p from 71p."We expect a wide consensus earnings range for 2016, and think improving and consistent underlying growth trends are needed for the shares to outperform," it said.Still, the bank said the nine-month announcement from Pearson does not change its view regarding the potential long-term growth opportunity in education, including the potential for the company to sell more products/services to more customers. JPMorgan Cazenove upgraded Lonmin to 'overweight' from 'neutral' and lifted the price target to 35p from 30p following the company's announcement on Wednesday of a rights issue and debt restructuring."Lonmin disclosed a revised business plan and funding strategy with its full-year 2015 trading update that should see the group survive low platinum group metal prices over the ensuing three financial years at least, in our view."Essentially, the group must address a liquidity crunch to see it benefit from higher PGM prices we see from 2017."The bank said that assuming the proposed $400m rights issue is successful and the company secures amended debt facilities as planned, the stock is undervalued on its base-case numbers.JPM said key risks include lower-than-forecast PGM prices and failure to implement the new business plan, restructuring and proposed refinancing. Pearson