Goldman Sachs Recommends Buying McGraw-Hill (MHP)

September 1, 2011 9:34 AM EDT
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Price: $55.93 +0.59%

Rating Summary:
    7 Buy, 3 Hold, 0 Sell

Rating Trend: = Flat

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    Up: 0 | Down: 0 | New: 0
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Goldman Sachs reiterated their Buy rating on McGraw-Hill (NYSE: MHP) and is telling clients to buy the stock for Q3 catalysts.

The firm notes recent headlines support their view that the company is focused on value creation with further potential catalyst in the form of external shareholder approaches and new leadership.

Some items for shareholders to note include: 1. WSJ reported MHP has hired an outside advisory firm to review strategic alternatives for the company’s education segment; 2. activist shareholder pointed out that MHP trades a wide gap to pure-play peers; 3. MHP hired Douglas Peterson, the former CEO of Citibank Japan, to replace Deven Sharma as the head of S&P.

In addition, Goldman pointed out that Bloomberg recently reported that rival rating agency Fitch settled a suit with CalPERS with no financial penalty. McGraw-Hill and Moody's (NYSE: MCO) are defendants in the same case.

Goldman sees 20% upside to their $50 price target.

For more ratings news on McGraw-Hill click here and for the rating history of McGraw-Hill click here.

Shares of McGraw-Hill closed at $42.11 yesterday.

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