Thomson Reuters (TRI) delivered upbeat Q3 2021 results as business momentum experienced in the first half of the year continued in the quarter. Revenue and earnings came above consensus estimates, with the company also raising its full-year 2021 revenue guidance. TRI shares fell 0.59% to close at $118.02 on November 2.
Thomson Reuters is a media conglomerate that provides news and business information services. It also offers value-added information to users in accounting, financial services, law tax, and corporate training.
Revenue in Q3 was up 6% year-over-year to $1.53 billion, exceeding consensus estimates of $1.5 billion. The increase can be attributed to a 6% revenue growth in four of the company’s five business segments. The big three segments, Legal Professionals, Corporates, and Tax & Accounting Professionals, accounting for 79% of total revenue. Total revenue posted a 6% organic revenue growth.
Adjusted EBITDA was down 7% year-over-year to $458 million. Adjusted EPS landed at $0.46, compared to $0.39 delivered the same quarter last year, and above consensus estimates of $0.38. (See Top Smart Score Stocks on TipRanks)
For the full year, Thomson Reuters is projecting revenue growth of between 4.5% and 5%, up from an initial guidance of between 4% and 4.5%. Organic revenue should grow by between 4.5% and 5% from an initial guidance of between 4% and 4.5%.
Thomson Reuters intends to invest between $500 million and $600 million as part of a two-year Change Program. The program seeks to transform it from a holding company to an operating company and from a content provider to a content-driven technology company.
Meanwhile, RBC Capital analyst Drew Mcreynolds downgraded the stock to a Hold from a Buy and increased the price target to $122 from $118, implying 3.37% upside potential to current levels. According to the analyst, the downgrade was necessitated by the strong share price performance year-to-date.
Consensus among analysts is a Hold, based on 2 Buys and 7 Holds. The average Thomson Reuters price target of $120.60 implies 2.19% upside potential to current levels.
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