Seven Wall Street analysts have rated McGraw Hill, the educational publisher that is leaning into AI, a "buy" following its recent IPO. In recent initiations, Deutsche Bank described the company as a “hidden gem,” while JPMorgan called it “a class leader in education.” These endorsements have lifted McGraw Hill’s stock price, though it remains below the IPO price from less than a month ago.
Details
At least seven Wall Street analysts as of yesterday, August 18, have initiated coverage of McGraw Hill stock with a "buy," according to Yahoo Finance.
McGraw Hill, now worth $2.8 billion on the New York Stock Exchange, is a "hidden gem" and in a good place to leverage generative AI to sell new products that could individualize a student’s learning journey, Deutsche Bank said in an initiation report quoted by CNBC. The company offers AI-incorporating educational solutions that help personalize learning, both for kids and for professionals.
"The company is well-positioned to take advantage of AI as its content, data-driven insights, and learning science help deliver personalized learning experiences and drive positive outcomes," wrote Deutsche Bank analyst Faiza Alwy. She expects revenue growth for the company as it settles more long-term education contracts. McGraw Hill typically enters into 5-8-year contracts with upfront payments creating a "predictable revenue backlog," Alwy noted. In the first quarter of fiscal 2026, ended June 30, the company's revenue rose 2.4% year over year to $535.7 million.
Deutsche Bank assigned a "buy" rating and a target price of $18 per share to the stock. This implies upside of 24% to the last closing price.
Goldman Sachs too highlighted the company's digital transformation, Investing.com wrote. "We believe [the digital transformation] will further increase customer stickiness and revenue visibility as a captive ecosystem for course content powered by AI is created," Goldman Sachs wrote. Its recommendation is a "buy" with a target price of $27 per share (86% upside versus current quotes).
JPMorgan also started McGraw Hill at "overweight" with a $21 per share target price (for upside of about 45%), calling the company “a class leader in education” with strong recurring revenue and room for a re-rating.
Baird launched with an "outperform" rating and the same $21 per share target price, citing attractive valuation and “incumbency advantages” in a stable, high-margin market.
Stifel initiated with a "buy" and a $19 per share target price, calling McGraw Hill “a recession-resistant business” with potential for margin improvement and leverage reduction post-IPO.
Amid the general upbeat mood, UBS was the only house to strike a cautious tone, starting coverage with a $15 per share target price and a "neutral" rating. The analysts pointed to demographic and policy headwinds, along with lingering questions over AI substitution. “In order to deliver targeted 5%+ revenue growth over time," Investing.com quoted the bank as saying, "we think share gains and execution are needed in this tougher market," they wrote.
McGraw Hill has a total of 11 "buy" ratings from Wall Street analysts versus just one "hold," according to MarketWatch. The average target price of $21 per share implies upside of nearly 45% versus the last close.
Stock performance
Yesterday, McGraw Hill’s stock price jumped nearly 9% to $14.50 per share. That remains about 15% below the IPO price; recall the company on June 24 placed nearly 24.4 million shares at $17 per share, valuing it at $3.25 billion. In morning trading today, the stock continued to rise, gaining 1.7% per share in the opening minutes.
The AI translation of this story was reviewed by a human editor.
