Education publisher Pearson (PSON) has been one of the big winners in 2022 with the shares up 60% compared with a drop of 6% in the blue-chip FTSE 100 index.

A key driver has been the momentum in the business which has prompted analysts to revise their earnings forecasts up significantly. Since the start of the year 2022 earnings expectations have risen by 22% while 2023 earnings are up by almost a third.

In other words, after a lengthy transformation process Pearson appears finally to be firing on all cylinders.

Over the last few years, the company has moved away from school printed material towards online digital tools for schools to
fill the skills gap.

Investors should expect further analyst upgrades after the company said (24 October) it was aiming to deliver £100 million of efficiencies in 2023 which would accelerate margin improvements two years ahead of its original plans.

Underlying group revenues for the three months to September were up 7% thanks to an ‘outstanding’ result in English Language Learning which delivered 36% year on year growth.

The Workforce Skills division also reported strong growth, with sales up 20% on last year, while Virtual Learning and Assessments grew their revenues by high single digits.

Pearson had repurchased £240 million of shares out of a planned £350 million buyback as of 30 September. The buyback potentially adds around 10% to future earnings per share growth.

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