Analysts have not exactly been bullish on media giant Pearson (LON:PSON) in recent months and Liberum is no exception, repeating its 'sell' rating on the shares ahead of tomorrow's trading update.
It has also reduced the target price to 540p from 640p previously.
Despite the group benefiting from a strengthening dollar, says the broker, it is widely recognised that 2016 will be a difficult year for the firm but we think the market still does not recognise the full extent of the secular issues.
"We think there is a significant chance of further restructuring charges and there is a risk to the dividend," says analyst Ian Whittaker.
Liberum assumes flat dividends of 51p in its forecasts but even they may be unsustainable, it says.
"PSON should consider reducing the dividend and use the cash to finance investment," it added.
Last month, US house Jefferies said the group has 'morphed' into a bewilderingly complicated and opaque business and slashed its target price to 685p from 1,070p.
Analyst David Reynolds noted that North America is clearly the problem child and the prospects for 2016 are not that rosy.
He reckons Pearson is now difficult to read, has limited visibility and is a "nightmare" to model.
The big news last year was the sale of its 50% stake in financial news magazine The Economist to the investment arm of the Italian Agnelli family that founded car giant Fiat (now Fiat Chrysler).
Also updating the market on Thursday is cycle and car parts group Halfords (LON:HFD) with its third quarter numbers and last week Investec repeated a 'buy' on the company ahead of next week's third quarter numbers, assessing how the weather may affect current trading.
Car maintenance accounts for 40% of the group's second half sales and is weather driven, it noted.
"While it has been wet (good for blades) 2H to date, relative to last year it hasn’t been cold/frosty (so not good for batteries)," the broker said.
Meanwhile, Numis rates shares a 'hold' and expects a material impact from the unseasonably warm weather in November and December on the key car maintenance side.
It notes shares have been "very weak" into this update, falling nearly 20% since the interim results and strategy presentation in November.
"Now trading on sub-10x cal-16 earnings, we see scope for a bounce in the absence of a material downgrade," said analyst Andrew Wade.
Significant announcements expected:
Royal Mail (LON:RMG), British Land, Land Securities (LON:LAND), Pearson (LON:PSON), SABMiller (LON:SAB), Halfords (LON:HFD).