The analyst Simon Wallis believes valuing Reed's total discounted cash flow
on a multiple of 6 times pre-tax earnings, a typical private equity buyout
valuation, gives the shares a potential value of 930p. The Swiss bank UBS also
believes there is more upside in Reed, giving the stock a more modest 740p price
target. Shares in Reed firmed 3p at 666p while the rivalPearson rallied 17.5p to
908p on news that it has acquired the online learning group eCollege for
Reed has already sold some of the Harcourt assets to Pearson but the rump educational business remains and likely will exceed earlier expectations on price.