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Thomson Reuters (TSE:TRI)
TSX:TRI
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Thomson Reuters
(TSX:TRI)
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Rating:69Neutral
Price Target:
C$185.00
▲(9.43% Upside)
Thomson Reuters' strong financial performance and positive earnings call insights are offset by bearish technical indicators and a high valuation. The company's robust growth in key segments and strategic focus on AI are promising, but current market conditions and valuation suggest caution in the short term.
Positive Factors
Recurring subscription model & Big 3 growth
Durable subscription and licensing revenue across Legal, Tax & Accounting and Corporates drives predictable, high-quality cash flows. Sustained 9% growth in the ‘Big 3’ indicates structural product adoption and stickiness, improving revenue visibility and resilience over 2-6 months.
High and improving profitability
Strong operating and net margins reflect pricing power, efficient cost structure and high-margin digital offerings. Reported adjusted EBITDA growth and margin expansion show scalable economics; durable margin tailwinds from platformized products and AI integration support sustainable profitability.
Low leverage and solid capital flexibility
Conservative leverage provides financial optionality for buybacks, M&A, or R&D investment without stressing the balance sheet. A low debt-to-equity ratio and solid ROE signal disciplined capital allocation and resilience to shocks, supporting long-term strategic investments.
Negative Factors
Declining gross profit margin
A meaningful drop in gross margin suggests rising direct costs or unfavorable product mix, which can erode the high-margin nature of subscription offerings. If persistent, this pressure could compress operating leverage and limit sustained margin improvement over the medium term.
Negative free cash flow growth
Declining free cash flow growth reduces internal funding for innovation, acquisitions, and returns. Even with healthy FCF conversion, a negative trend may reflect working capital or capex pressures that could constrain reinvestment capacity and shareholder distributions over several quarters.
Exposure to print decline and government contract weakness
Structural declines in Global Print and volatility from government contract cancellations reduce revenue diversification and create headwinds to organic growth. Persistent weakness in these areas can drag overall revenue momentum and require sustained investment to offset declines.
Thomson Reuters (TRI) vs. iShares MSCI Canada ETF (EWC)
Market Cap
C$75.21B
Dividend Yield1.83%
Average Volume (3M)370.55K
Price to Earnings (P/E)31.0
Beta (1Y)0.44
Revenue Growth5.89%
EPS Growth-21.32%
CountryUS
Employees26,400
SectorIndustrials
Sector Strength72
IndustrySpecialty Business Services
Share Statistics
EPS (TTM)1.20
Shares Outstanding444,842,500
10 Day Avg. Volume490,876
30 Day Avg. Volume370,553
Financial Highlights & Ratios
PEG Ratio-2.64
Price to Book (P/B)6.02
Price to Sales (P/S)9.96
P/FCF Ratio39.07
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
C$247.24Price Target Upside46.25% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering10
EPS Forecast (FY)N/A
Revenue Forecast (FY)N/A
Thomson Reuters Business Overview & Revenue Model
Company DescriptionThomson Reuters Corporation provides business information services in the Americas, Europe, the Middle East, Africa, and the Asia Pacific. It operates in five segments: Legal Professionals, Corporates, Tax & Accounting Professionals, Reuters News, and Global Print. The Legal Professionals segment offers research and workflow products focusing on legal research and integrated legal workflow solutions that combine content, tools, and analytics to law firms and governments. The Corporates segment provides a suite of content-enabled technology solutions for legal, tax, regulatory, compliance, and IT professionals. The Tax & Accounting Professionals segment offers research and workflow products focusing on tax offerings and automating tax workflows to tax, accounting, and audit professionals in accounting firms. The Reuters News segment provides business, financial, and international news to media organizations, professional, and news consumers through news agency and industry events. The Global Print segment offers legal and tax information primarily in print format to legal and tax professionals, governments, law schools, and corporations. The company was formerly known as The Thomson Corporation and changed its name to Thomson Reuters Corporation in April 2008. The company was founded in 1851 and is headquartered in Toronto, Canada. Thomson Reuters Corporation is a subsidiary of The Woodbridge Company Limited.
How the Company Makes MoneyThomson Reuters generates revenue primarily through subscription-based models and software licensing. Its key revenue streams include: 1) Legal Professionals: Providing legal research tools, case law databases, and analytics solutions. 2) Financial Professionals: Offering financial market data, trading platforms, and analytical tools for investment professionals. 3) Tax and Accounting: Supplying software and services for compliance, tax planning, and accounting professionals. 4) Media: Licensing news content and providing insights to media organizations. Additionally, strategic partnerships with technology firms enhance its service offerings and expand its market reach, contributing substantially to its revenue growth.
Thomson Reuters Earnings Call Summary
Earnings Call Date:Nov 05, 2025
(Q3-2025)
| % Change Since: |
Next Earnings Date:Feb 05, 2026
Earnings Call Sentiment Neutral
The earnings call highlighted strong performance in the Big 3 segments with notable customer feedback on AI products and successful capital deployment through share repurchases. However, challenges such as declines in Global Print revenue, temporary factors affecting overall revenue growth, and recent government segment downgrades were noted.Q3-2025 Updates
Positive Updates
Strong Revenue Growth in Big 3 Segments
Total company organic revenues rose 7% with the Big 3 segments growing by 9%. Legal Professionals segment accelerated to 9% organic revenue growth, driven by continued Westlaw momentum and strong double-digit growth from CoCounsel and Cocounsel drafting.
Positive Customer Feedback on AI Products
Customer feedback on the Agentic AI launches over the summer has been very positive and initial sales trends are encouraging, especially for the CoCounsel legal integrated offer, Westlaw advantage, and CoCounsel for tax, audit, and accounting.
$1 Billion Share Repurchase Program Completed
Recently completed the $1 billion share repurchase program announced in mid-August, acquiring approximately 6 million shares, indicating strong capital capacity and commitment to shareholder value.
Improved Profit Margins and EBITDA Growth
Adjusted EBITDA increased 10% to $672 million, reflecting a 240 basis point margin increase to 37.7%, higher than anticipated due to healthy operating leverage and good cost discipline.
Negative Updates
Global Print Revenue Decline
Global Print organic revenues declined 4% year-on-year, contributing to slower total organic revenue growth trending closer to 3%.
Temporary Factors Affecting Revenue Growth
Full year total and organic revenue growth is trending closer to 3% and 7% due to slower ramp of commercial print volumes, recent U.S. federal government cancellations and downgrades, and softer bookings trends at corporates.
Challenges in Government Segment
Faced recent downgrades and losses related to U.S. federal efficiency programs, impacting full-year organic revenue growth by approximately 20 basis points.
Company Guidance
During the Thomson Reuters Third Quarter 2025 Earnings Call, the company provided detailed guidance on its financial performance and outlook. For the third quarter, total organic revenues grew 7%, with the Big 3 segments—Legal, Tax & Accounting, and Corporates—growing by 9%. The Legal segment, driven by Westlaw and CoCounsel, saw a 9% organic revenue increase, while Tax & Accounting grew 10%, fueled by its Latin American and U.S. businesses. The company reaffirmed its full-year 2025 outlook, projecting 9% organic revenue growth for the Big 3. Looking ahead to 2026, Thomson Reuters anticipates 7.5% to 8% organic revenue growth, with an expected 100 basis point EBITDA margin expansion and higher free cash flow, driven by ongoing innovation and technology integration, particularly in AI. The company completed a $1 billion share repurchase program, maintaining a robust capital position, and expressed confidence in its ability to pursue both organic and inorganic growth opportunities.Thomson Reuters Financial Statement Overview
Summary
Thomson Reuters exhibits strong financial health with impressive revenue growth and profitability metrics. The balance sheet is solid with low leverage, and cash flow management is generally effective despite recent declines in free cash flow growth. The company is well-positioned in its industry, though it should monitor cost pressures impacting gross margins.Income Statement
Thomson Reuters demonstrates strong revenue growth with a TTM increase of 7.93% and consistent profitability, as evidenced by a solid EBIT margin of 32.06% and a net profit margin of 23.82%. However, the gross profit margin has decreased from 79.31% in 2024 to 63.15% in TTM, indicating potential cost pressures.85
Very Positive
Balance Sheet
The company maintains a healthy balance sheet with a low debt-to-equity ratio of 0.19 in TTM, reflecting prudent financial management. Return on equity is strong at 14.39%, though it has decreased from previous years. The equity ratio remains stable, indicating a solid capital structure.78
Positive
Cash Flow
Operating cash flow remains robust, but free cash flow growth has turned negative at -3.69% in TTM, suggesting potential challenges in cash generation. The free cash flow to net income ratio is healthy at 74.22%, indicating efficient cash conversion.72
Positive
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 7.38B | 7.26B | 6.79B | 6.63B | 6.35B | 5.98B |
| Gross Profit | 6.53B | 5.76B | 2.70B | 4.22B | 3.87B | 3.71B |
| EBITDA | 3.22B | 3.05B | 2.95B | 3.01B | 2.02B | 2.76B |
| Net Income | 1.76B | 2.21B | 2.69B | 1.89B | -553.00M | 1.69B |
Balance Sheet | ||||||
| Total Assets | 17.83B | 18.44B | 18.68B | 21.71B | 22.15B | 17.88B |
| Cash, Cash Equivalents and Short-Term Investments | 617.40M | 1.89B | 1.36B | 1.27B | 886.00M | 2.40B |
| Total Debt | 2.17B | 3.08B | 3.54B | 4.76B | 3.79B | 3.77B |
| Total Liabilities | 6.08B | 6.43B | 7.62B | 9.76B | 8.31B | 7.90B |
| Stockholders Equity | 11.75B | 12.01B | 11.06B | 11.95B | 13.83B | 9.98B |
Cash Flow | ||||||
| Free Cash Flow | 1.82B | 1.85B | 1.80B | 1.32B | 1.29B | 1.24B |
| Operating Cash Flow | 2.45B | 2.46B | 2.34B | 1.92B | 1.77B | 1.75B |
| Investing Cash Flow | -1.14B | 680.00M | 3.51B | -462.00M | -504.00M | -138.00M |
| Financing Cash Flow | -2.41B | -2.46B | -5.63B | -1.16B | -2.27B | -644.00M |
Thomson Reuters Technical Analysis
Negative
169.06
Price Trends
181.41
Negative
200.48
Negative
230.09
Negative
Market Momentum
-4.30
Positive
34.92
Neutral
31.72
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:TRI, the sentiment is Negative. The current price of 169.06 is below the 20-day moving average (MA) of 175.05, below the 50-day MA of 181.41, and below the 200-day MA of 230.09, indicating a bearish trend. The MACD of -4.30 indicates Positive momentum. The RSI at 34.92 is Neutral, neither overbought nor oversold. The STOCH value of 31.72 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TSE:TRI.
Thomson Reuters Peers Comparison
UnderperformOutperform
Sector (63)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
74 Outperform | C$1.94B | 11.38 | 8.95% | 8.32% | -2.45% | 44.20% | |
71 Outperform | C$719.09M | 35.35 | 6.36% | 1.98% | 3.69% | 92.38% | |
69 Neutral | C$75.21B | 31.02 | 14.87% | 1.83% | 5.89% | -21.32% | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% | |
54 Neutral | C$93.60M | 9.20 | 26.87% | 5.99% | -7.01% | ― |
* Industrials Sector Average
TSE:TRI
Thomson Reuters
169.06
-66.68
-28.28%
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Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.