Thomson Reuters (TRI) Stock Forecast & Price Target

Thomson Reuters has demonstrated solid financial performance, reporting a 9% organic revenue growth in its three largest segments, which comprise the legal professionals, tax and accounting, and corporates segments. The company also experienced an increase in recurring revenues by 10% and transaction revenues by 13%, indicating strong demand for its UltraTax products and services. Additionally, ongoing revenue growth is supported by the migration of customers to enhanced platforms such as Westlaw Precision, and there is potential for further revenue acceleration driven by advancements in artificial intelligence.

Thomson Reuters is experiencing significant financial challenges, as evidenced by a 7% year-over-year decrease in EBITDA and a decline in margins from 31.2% to 26.8%, attributed to increased investment costs in AI products. Furthermore, the ongoing integration of the Pagero acquisition has resulted in ongoing margin pressures, with corporate segment margins expected to remain flat amid heavy investments in sales resources. Projections indicate a continuation of sluggish organic revenue growth, compounded by anticipated further contraction in EV/EBITDA multiples, reflecting a more challenging operating environment and rising interest rates.