Broker snap: Pearson's peers offer better value

26th Oct 2009 13:14

Panmure Gordon has revised its earnings forecasts for publishing group Pearson on the back of last week's trading statement but continues to see more attractive stocks elsewhere in the sector.Following FT-publisher Pearson's 9-months results Panmure Gordon has upgraded its earnings per share forecasts for the years spanning 2009 - 2011 by 5% - 7%, representing the broker's second upgrade in a row in the wake of a Pearson trading update.Even with the revised estimates, Pearson is on a projected price/earnings ratio for 2010 of 12.5. 'On valuation grounds, we therefore prefer the likes of UBM, Informa and Reed to Pearson. These names trade on lower multiples, have roughly equivalent yields and more scope for earnings surprises.'The broker has raised its price target for Pearson from 750p to 850p.