Proactive Investors - Pearson PLC (LSE:LON:PSON)'s shares rose 3.1% after the company stated it was on track to meet annual guidance and pledged a £300mln share buyback to start in the second half of the year.
In a trading update, the education publisher reported total group sales rose 2% in the first quarter with performance in each of Pearson's divisions “in line with or ahead of our expectations”.
The company said it was on track for delivery of £120mln of cost efficiencies this year.
Andy Bird, Pearson's chief executive, said: "Pearson has had a strong start to the year with results ahead of our expectations."
Assessment & Qualifications sales grew 6%, English Language Learning sales increased 66%, Workforce Skills sales grew 8%, but Virtual Learning sales decreased 14% and Higher Education sales were down 5%.
Pearson said its financial position remains robust, with low net debt and strong liquidity.
Shore Capital analyst Roddy Davidson was impressed.
“We are pleased to note the continued progress and momentum highlighted in today’s statement and remain fundamentally positive on Pearon’s suitability to capitalise on the strong growth potential across the global learning market,” he said.
He thinks the current valuation is “undemanding” relative to the growth prospects.
Reiterating a 'buy' on the stock, Davidson said he sees 26% upside potential from current levels.
“We also view Pearson as a highly attractive strategic asset which could attract external interest.”