BUZZ-Sky v Pearson: exploring the valuation discrepancy

** Valuations at Sky (LSE: BSY.L - news) still attractive vs media peer Pearson (Xetra: 858266 - news) , despite increasingly divergent performance on severe downgrades at the latter

** Sky fwd EV/EBITDA 10.6x v 11.4x for Pearson

** Mean reversion to ten-year historical average of 9.6x for Pearson suggests fair value of 975p, according to analysts at Aviate

** Pearson has moved from among the strongest to the weakest for analyst revisions in the space of three months, according to Starmine, while Sky screens well for analyst revisions and price momentum. Chart: http://link.reuters.com/kam35w

** Berenberg and Morgan Stanley (Xetra: 885836 - news) both cut Pearson to "sell" in July

** Room for the downgrades trend to continue: 9 "buy", 9 "hold", 6 "sell" at Pearson against 7 "buy", 12 "hold", 8 "sell" at Sky

** Pearson down c. 20 pct since end-March, Sky up 12 pct over the same period

** Pearson weakness driven by continuing worries over co's core US education business (Liberum expects a profit warning at some point during 2015) in which it is now increasingly dependent following sale of the FT (RM (LSE: RM.L - news) : alasdair.pal.thomsonreuters.com@reuters.net)