What Happened?
Shares of educational publishing and media company Scholastic (NASDAQ:SCHL) fell 1.2% in the afternoon session after B. Riley initiated coverage on the stock with a "Buy" rating and a $37 price target. The new rating from the investment firm suggests a belief that the educational publishing and media company's shares are poised for growth. An initiation of coverage by an analyst can often attract new investor attention to a stock. The "Buy" rating indicates a strong positive outlook, and the $37 price target implies a potential upside from its recent trading levels, signaling confidence in the company's future performance.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy Scholastic? Access our full analysis report here, it’s free.
What Is The Market Telling Us
Scholastic’s shares are quite volatile and have had 19 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 22 days ago when the stock gained 4.3% on the news that the latest Consumer Price Index (CPI) report showed inflation holding steady, bolstering investor optimism for a potential interest rate cut by the Federal Reserve. The data, which revealed that inflation remained at 2.7% for the year ending in July, was seen as a positive sign by investors. This stability increases the likelihood that the Federal Reserve might lower interest rates at its upcoming September meeting. Lower interest rates can stimulate the economy by making borrowing cheaper for both consumers and businesses, which often translates into higher consumer spending. This is particularly beneficial for the Consumer Discretionary sector, which includes companies selling non-essential goods and services like apparel, travel, and electronics.
Scholastic is up 18.9% since the beginning of the year, but at $25.14 per share, it is still trading 21.6% below its 52-week high of $32.04 from September 2024. Investors who bought $1,000 worth of Scholastic’s shares 5 years ago would now be looking at an investment worth $1,123.
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