Benchmark Still Likes The McGraw-Hill Companies (MHP)

The Benchmark Company analysts Edward J. Atorino and James T. Dobson reiterated their Buy rating for shares of The McGraw-Hill Companies, Inc. (NYSE: MHP), with a price target of $42.

The analysts maintained a favorable outlook on The McGraw-Hill Companies' education business, saying that education revenue could rise as much as 8% due to rising enrollments.

Although the senate banking bill that is now being discussed could increase the risks associated with credit ratings, the analysts said that they don't believe there will be any fundamental changes in the way that the business operates.

The Benchmark Company analysts wrote, "for 1Q10, we expect total revenue to be $1.2 billion, up 5% y/y reflecting the absence of Business Week and the seasonality of educational publishing. We estimate EPS of $0.24, up 19% y/y on improvement at S&P and in Information and Media, which is benefiting from a recovery in broadcasting ad revenues. We maintain our 2010 EPS estimate of $2.62, up 10% y/y, with revenues of $6.3 billion, up 6% y/y. Operating cash flow is expected to be $1.9 billion, up 7% y/y."