Pearson PLC (LSE:PSON) was sent to the corner by scribes in the City as the coursework and e-learning group’s latest trading update was graded as distinctly underwhelming.
UBS said Pearson missed targets all through the quarter, with the nine-month sales improvement of 10% implying a third-quarter drop of 2% against expectations of 7% growth.
Courseware revenues were down 9% for the nine months to September compared to a dip of 2% at the end of quarter one.
Pearson believes the weak performance in US HE Courseware was due to lower enrolments, particularly in community colleges, and continued print declines although not as acutely as in prior years.
Pearson sales up 10% but effects of Covid dragging on
Virtual learning did better than expected while the Pearson+ app has 2mln registered users, though UBS notes only 100,000 of these are paying subscribers.
Pearson reiterated underlying profits this year of £377mln, but UBS said it expects downgrades as result of the update.
Its price target is 800p against 640p, down 12% today.