PSO Stock Analysis: Buy, Sell, or Hold?

PSO - Pearson plc

Books: Publishing or Publishing & Printing
$13.16
0.05 (0.38%) ▲
HOLD
MODERATE Confidence
Protect Your PSO Gains
Last Updated: January 30, 2026
Earnings: Feb 27, 2026 26d

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Interactive Price Chart (1 Month)

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💡
Bottom Line:
📊 HOLD: PSO shows mixed signals. Fine to hold existing positions. Not urgent to buy or sell.

Long-Term Wealth Forecast (2031)

Based on Analyst Consensus Growth & Historical Valuation

0% (Stagnation) 50% (Hyper Growth)
EST. PRICE IN 2031
$19.34
Based on 7.3% avg growth
INTRINSIC VALUE TODAY
$12.01
Trading above fair value

How this is calculated: We use a Growth Decay Model: starting with analyst consensus growth (adjusted above) and gradually slowing it down to a long-term terminal rate (4%) by Year 5. This provides a more realistic valuation than assuming constant hyper-growth. We then apply a 14.7x Exit PE.

In-depth Analysis How we analyze

Valuation Analysis: PSO is currently trading at $13.16, which is considered slightly low relative to its 30-day fair value range of $12.95 to $14.24. The stock's valuation (Forward PE: 14.2) is in line with its historical norms (14.7). Remarkably, the market is currently pricing in an annual earnings decline of 1.3% over the next few years. This pessimistic expectation contrasts with the company's recent 7.5% earnings growth, suggesting potential undervaluation if the company simply maintains stability.

Technical Outlook: Technically, PSO is in a downtrend. The price is approaching resistance at $13.29. A breakout above this level would be a bullish signal, while rejection here could lead to consolidation.

Market Sentiment: PSO has a weak technical setup (25/100), with bearish trendlines and momentum suggesting caution for short-term entries. The stock is fairly positioned - fine to hold existing positions or accumulate slowly on dips, but not an urgent buy.

Quick Decision Summary

Current Position SLIGHTLY LOW
Fair Price Range $12.95 - $14.24
Company Quality Score 53/100 (HOLD)
Volume Confirmation HIGH
Confidence Score 52.4%

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All Signals

  • BULLISH: Price oversold vs 30-day range
  • BEARISH: Weak technical setup (25/100)
  • BULLISH: High volume confirmation
  • NEUTRAL: Near Wall St target ($14.35)

Fair Price Analysis

30-Day Fair Range $12.95 - $14.24
Current vs Fair Value SLIGHTLY LOW

Support & Resistance Levels

Support Level $12.42
Resistance Level $13.30
Current Trend Downtrend

Fundamental Context

Forward P/E (Next Year Est.) 14.16
Wall Street Target $14.35 (+9.5%)
Revenue Growth (YoY) -1.8%
Earnings Growth (YoY) 7.5%
Profit Margin 12.5%
Valuation Discount vs History -1.3% cheaper
PE vs Historical 14.2 vs 14.7 FAIR
Market-Implied Price Targets If current PE multiple persists
Implied Growth (YoY): -1.3% (market-implied from PE analysis)
1-Year Target $12.94 (-1%)
2-Year Target $12.77 (-3%)
3-Year Target $12.61 (-4%)
3-Yr Target (if PE normalizes) (PE: 14→15) $13.09 (0%)
3-Year Scenarios Using analyst projected EPS growth
Bull: (PE: 22.3, Growth: 10.6%) $27.91 (+113%)
Base: (SPY PE: 14.2, Growth: 10.6%) $17.72 (+35%)
Bear: (PE: 12.0, Growth: 10.6%) $15.06 (+15%)
📈 Valuation based on Current Earnings
RECOVERY PLAY: Stock looks expensive now (14x PE), but valuation improves significantly next year (14x PE) as earnings recover.
Trailing PE: 14.46 | Current EPS (TTM): $0.90
Bull Case $14.72 (+12%)
Analyst growth 2.9%, PE expands to 15.9
Base Case $13.38 (+2%)
Market implied 2.9%, PE stable at 14.5
Bear Case $8.85 (-33%)
Severe decline -20.0%, PE contracts to 12.3
These are projections based on PE multiples and EPS growth scenarios, not predictions. Actual results may vary significantly.
💡 Upside Surprise Potential
If earnings stabilize (0% growth), PE could expand from 14.2 to 14.7
Stabilization Target: $13.61 (+3.8%)
PE Expansion Potential: +3.8%
Last updated: January 31, 2026 3:13 PM ET
Data refreshes hourly during market hours. Next update: 4:13 PM
🔥 Top Stocks Breaking Out Now
Ticker Score Recommendation Change %
Insider Activity (6 Months)
0
Buys
0
Sells
0
Net
NEUTRAL

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