McGraw Hill F4Q’26: The Beat in the Quarter Overshadowed by Soft K-12 Outlook; Maintain OW with Dec-27 PT of $20

Research evidence excerpt

McGraw Hill F4Q’26: The Beat in the Quarter Overshadowed by Soft K-12 Outlook; Maintain OW with Dec-27 PT of $20

J P M O R G A N North America Equity Research

11 June 2026

McGraw Hill Overweight

MH, MH US

F4Q’26: The Beat in the Quarter Overshadowed by Soft Price (10 Jun 26):$12.80

K-12 Outlook; Maintain OW with Dec-27 PT of $20 ▼Price Target (Dec-27):$20.00 Prior (Dec-26):$21.00

McGraw Hill reported a stronger-than-expected F4Q26, with adj. EBITDA

beating our and consensus expectations by 7-9%. FY26 finished above the high Media, Entertainment and

Advertisingend of guidance, and the upside was broad-based across K-12 and Higher Ed,

underpinned by strong market shares in both segments. The FY27 outlook, David Karnovsky, CFA AC

particularly for K-12, came in more cautious than expected, and while the headline (1-212) 622-1206

david.karnovsky@jpmorgan.com

adj. EBITDA guidance came in broadly in line with market expectations, we see

~30% downside to consensus FCF in FY27. With the stock trading well below the Alexey Philippov, CFA

(1-212) 622-0810

$17 IPO price, we believe the market is already discounting challenges in K-12 alexey.philippov@jpmorgan.com

during the current selling season and its ~50% discount to peer PSON keeps us OW

Douglas Wardlaw

on the name. We also flag the $50m buyback announced today, which we view as (1-212) 622 4885

opportunistic given low share liquidity, deleveraging targets and M&A pipeline. douglas.wardlaw@jpmchase.com

The company also announced an Investor Day later this year, which we expect to Kiscada A Hastings

be the next key catalyst for the stock, as visibility on K-12 will remain limited at (1-212) 622-0226

the August 1Q print. We are establishing a Dec-27 PT of $20/sh (vs. our Dec-26 kiscada.hastings@jpmchase.com

PT of $21). J.P.