S&P revises Pearson view to negative

S&P said it revised the outlook for Pearson to negative from stable and affirmed its long-term ratings on the group and its debt at BBB.

Pearson’s 2020-2021 profitability and EBITDA generation will likely be weaker than the agency had previously anticipated, reflecting the ongoing substantial decline in its U.S. higher education courseware sales.

The outlook revision to negative reflects Pearson’s S&P Global Ratings-adjusted EBITDA will likely fall below S&P’s previous base case this year, S&P said.

“Based on the recent trading update, we estimate that Pearson’s S&P Global Ratings-adjusted debt to EBITDA increased to about 1.7x-1.9x in 2019 from 1.6x in 2018,” S&P said in a press release.

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