So Far So Good in 2021 for Narrow-Moat Pearson

Almost spookily, narrow-moat Pearson’s revenue rose by 17% in the first half of the year, the exact quantum by which it fell in the first half of 2020. Operating profit swung back into the black, following the loss posted at this point last year. No changes to full-year 2021 guidance, but management have stated that they expect operating profit to be in line with market expectations, something that should reassure investors, given the numerous profit warnings posted by the company in recent years. We did not see anything in the release to change our view on the stock, and reiterate our GBX 870 fair value estimate. With the shares having almost doubled off their March 2020 lows, we see only modest upside with the name.