In a note to clients, analysts at Barclays said Pearson faces many challenges and they have some concerns that there are more downside risks.
READ: Pearson up after saying on course to meet expectations as it reports 1% rise in first-quarter underlying revenue
“We think that the shares are no longer pricing these risks, with even an upside scenario, which requires very good execution, offering limited share price upside,” the analysts said.
While over time the shift from new print books to print rental will become ‘less of a drag’, the analysts still see ‘a multi-year drag from print’.
The analysts also see risks from slow take-up of integrated digital products, competitive pressures from Cengage Unlimited and the role of Amazon in this market over time.
In morning trading, Pearson’s shares fell 2.9% to 869.6p.