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Thomson Reuters Corp TRI

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Morningstar’s Analysis

Valuation
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1-Star Price

PREMIUM

5-Star Price

PREMIUM

Economic Moat

PREMIUM

Capital Allocation

PREMIUM

Thomson Reuters Starts 2021 Strong as Financial Results Beat Expectations

Rajiv Bhatia, CFA Equity Analyst

Analyst Note

| Rajiv Bhatia, CFA |

Thomson Reuters began 2021 on a high note with revenue and earnings topping expectations. Total first-quarter revenue of $1.58 billion beat the FactSet consensus estimate of $1.55 billion, while adjusted EPS of $0.58 easily beat the consensus estimate of $0.42 per share. Despite the strong quarter, the firm did tweak its 2021 revenue outlook a touch higher but maintained its adjusted EBITDA margin outlook of 30%-31% as investment spending is expected to ramp up throughout the year. We expect to maintain our narrow moat rating and $94 per share fair value estimate.

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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 closed in 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, the 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 Mar 31, 2021
Fiscal Year End Dec 31, 2021
Stock Type
Employees 24,000

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