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Prime Markets in the Press - Pearson (PSON)

28/02/2011

Shares in Pearson (PSON.L) gain 0.9 percent, outperforming a 0.6 percent decline by the FTSE 100 .FTSE index, as the publisher reports "robust" full-year results, leading Numis Securities to raise its target price.

Pearson, which owns the world's largest education technology and publishing business as well as the Financial Times and Penguin books, posts a 19 percent rise in full-year adjusted earnings per share of 77.5 pence, after an 8 percent rise in sales to 5.66 billion pounds.

Numis points out that Pearson's normalised EPS was slightly ahead of its estimate, and above the company's guidance of 76 pence.

"We expect to maintain our top-end forecasts … though see scope for upgrades as we move through 2011, both on fundamentals and as Pearson relevers its balance sheet, which is almost ungeared following the IDC disposal," Numis says in a note.

Numis repeats its "add" rating for Pearson, with its target price hiked to 1,209 pence, up from 1,162 pence.

Meanwhile, Richard Curr, head of dealing for CFD specialists Prime Markets Ltd, says the technical picture also supports the fundamentals, with Pearson shares having been in a rising trend channel since the start of December 2010, with its base at 1,018 pence.

"Provided the price action remains above the 50 day moving average at 1,030 pence, we expect a retest of upper January resistance at 1,108 pence in the next 7-10 days," adds Curr.

Reuters

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