Down 11.1% in 4 Weeks, Here's Why You Should You Buy the Dip in Pearson (PSO)

Core Viewpoint - Pearson (PSO) has experienced significant selling pressure, resulting in an 11.1% decline over the past four weeks, but analysts anticipate better earnings than previously expected, indicating a potential rebound for the stock [1]. Group 1: Technical Indicators - The Relative Strength Index (RSI) is utilized to determine if a stock is oversold, with a reading below 30 typically indicating this condition [2]. - PSO's current RSI reading is 28.88, suggesting that the heavy selling may be exhausting itself and a trend reversal could occur soon [5]. - The RSI helps investors identify potential entry points for stocks that have fallen below their fair value due to excessive selling pressure [3]. Group 2: Fundamental Indicators - There has been a consensus among sell-side analysts to raise earnings estimates for PSO, resulting in a 1.2% increase in the consensus EPS estimate over the last 30 days [7]. - An upward trend in earnings estimate revisions is generally associated with price appreciation in the near term [7]. - PSO holds a Zacks Rank 2 (Buy), placing it in the top 20% of over 4,000 ranked stocks, which further supports the potential for a turnaround [8].