Pearson shares a “free option on American Families Plan”, says this influential broker


Electronic publisher Pearson PLC (LSE:PSON) is a “free option on American Families Plan” (AFP), according to an influential London broker that has upgraded the stock to “overweight”.

JP Morgan Cazenove (JPMC) reckons the shares, which have underperformed the STOXX Europe 600 by 30% in the year to date, are worth 960p each (or 25% more than they are worth today).

The AFP, meanwhile, should drive “substantial investment” into community colleges, which in turn should benefit those involved in the sector, such as Pearson, JPMC pointed out.

Its analysts listed a series of potential stock drivers for the FTSE 100 group, including a post-pandemic recovery and asset sales that could then pave the way for share buybacks and value-accretive M&A activity.

Late morning, Pearson shares were changing hands for 780p, up 3%.


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