Jefferies rates Pearson a "hold" after 2014 profits warning

Pearson shares have been rated a "hold" by Jefferies with a target price of 1128p after the publishing company reported a 27 per cent fall in adjusted operating profits to 736m pounds.After warning of another year of tough trading conditions in the US, with a stronger pound making matters worse, Pearson said it expected earnings per share (EPS) to be in the range of 62-67p."In adjusted EPS, the guide between 67p and 62p, consensus currently points at 75p of earnings. Whichever way one cuts the new guide though, either pre or post, this looks like a very cautious number at the 65p mid-point," the broker said."Given the strengths of the senior management team and the quality of the Pearson educational offer, there will come a time to buy the stock. But for now, with further pressures on estimates emerging and the stock on 14.3 times consensus 2015 adjusted EPS estimates, that time has not yet come, in our opinion. We continue to prefer ITV, WPP and Reed Elsevier, in that order."FP