McGraw Hill (MH) reported a solid beat in fiscal Q1, driven by strength in K-12 and Higher Ed, though K-12 benefited from a timing impact of stronger deliveries in June from July, Morgan Stanley said Thursday in a note.

Still, the company has left its 2027 guidance unchanged on revenue and adjusted EBITDA, the report said.

The note pointed to new wins, strong retention, pricing, digital engagement, and capture rates were positives in the quarter.

Industry environment remains similar to a few months ago, with focus on August/September back-to-school selling period, it said, adding that the stock remains attractive.

"Continue to recommend an OW rating for MH given its discount to PSON-LN and attractive upside," the note said. OW refers to overweight, and PSON refers to Pearson.

But Morgan Stanley cut its price target to $16 from $18 following a model update.

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