Gabelli Rates Scholastic Corp At Buy (SCHL)

Gabelli & Co. rates shares of Scholastic Corp with a Buy rating SCHL. In a note to clients, Gabelli writes, "On Feb 11, 2011, we hosted a mgmt meeting at SCHL's New York headquarters. Discussions focused on intervention needs, new product development, funding, technology threats, and SCHL's commitment to shareholders, and included a Read 180 demonstration. Lower digital costs next year and higher technology sales should combine to bring earnings toward the $2.50-per share level for the fiscal year ending May 31, 2012. Notably, we think that higher sales of e-books, helped by a rapidly growing installed base, can drive revenues and potentially reduce costs. SCHL is trading at 7.1x this year's EBITDA and 6.2x next year's projections. We calculate a $41 PMV and see that rising to $55 for the year ending May 31, 2013."