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Thomson Reuters Corp TRI

Rating as of

Morningstar’s Analysis

Valuation
Currency in USD
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1-Star Price

PREMIUM

5-Star Price

PREMIUM

Economic Moat

PREMIUM

Capital Allocation

PREMIUM

Raising Our Fair Value Estimate on Thomson Reuters

Rajiv Bhatia, CFA Equity Analyst

Analyst Note

| Rajiv Bhatia, CFA |

After updating our valuation model, we are raising our fair value estimate for narrow-moat rated Thomson Reuters to $94 per share from $75 as we project greater revenue and margin expansion following the firm's release of fourth-quarter results and its investor day goals. As the company streamlines its operations, we expect double-digit adjusted earnings growth during the next five years, with revenue expanding at about 4% annually and adjusted EBITDA margin expanding meaningfully during 2021-25.

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Company Profile

Business Description

Thomson Reuters is the result of the $17.6 billion megamerger of Canada's Thomson and the United Kingdom's Reuters Group in 2008 and the 2018 carve-out of its finance and risk business, Refinitiv, in which it holds a 45% stake. In 2019, the company agreed to exchange its 45% stake in Refinitiv for a 15% stake in LSE, which is anticipated to close early 2021. Since the divestiture, the company is more concentrated on selling its flagship legal data and software, WestLaw, and its tax accounting software, OneSource. Reuters sees roughly 80% of revenue and 70% of expenses attributed to the United States, while the remainder (largely through the global print and Reuters News segments) is distributed across Latin America, Europe, Middle East, Africa, and Asia-Pacific.

Contact
333 Bay Street, Suite 300
Toronto, ON, M5H 2R2, Canada
T +1 416 687-7500
Sector Industrials
Industry Consulting Services
Most Recent Earnings Dec 31, 2020
Fiscal Year End Dec 31, 2021
Stock Type
Employees 24,000

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