Thomson Reuters (TRI) Stock Forecast & Price Target

Thomson Reuters demonstrates a strong positive outlook as evidenced by significant growth in EBITDA, which increased 14% year-over-year to $222 million with improved margins of 53.6%. The company also showcased robust performance in recurring revenues, which rose 12% organically, driven by its Latin American business and key products like UltraTax and CoCounsel. Additionally, the expansion in margins across major segments indicates that Thomson Reuters is successfully leveraging its operational capabilities for sustained growth.

Thomson Reuters faces a negative outlook primarily due to its government segment experiencing downgrades and losses linked to federal efficiency programs, which are expected to hamper organic revenue growth by 20 basis points. The stock has seen volatility, including a 6% decline recently, largely driven by concerns over potential disruptions from AI startups in the SaaS space, prompting a downward revision of its EV/EBITDA target multiple from 24x to 15x. Additionally, projections indicate that corporate revenue growth will remain under pressure, particularly in the near term due to booking softness, with expectations for a potential recovery only in the latter half of the next year.