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Thomson Reuters (TSX:TRI) came under pressure after Anthropic released an AI powered legal tool that automates contract review and other workflows, sparking concerns about potential disruption to established legal research and workflow providers.
See our latest analysis for Thomson Reuters.
The AI shock comes on top of a sharp reset in sentiment, with a 1 day share price return of 15.83% decline and a 90 day share price return of 38.38% decline. The 1 year total shareholder return of 47.11% decline contrasts with a still positive 5 year total shareholder return of 27.76%. This suggests momentum has recently faded even after longer term holders had previously seen gains.
If this AI driven selloff has you reassessing your tech exposure, it could be a useful moment to scan high growth tech and AI stocks for other names shaping the next wave of software and data tools.
With CA$125.41 per share, a reported intrinsic discount of roughly 49%, ongoing revenue and net income growth, and a mixed track record on long term returns, investors may need to consider whether this is a reset opportunity or whether the market is already pricing in Thomson Reuters’ future growth.
Against the last close of CA$125.41, the most followed narrative sees Thomson Reuters as materially undervalued, with a fair value anchored at CA$265.98 using a 6.37% discount rate.
The company’s proprietary, authoritative content and integrated product suite positions it as a trusted platform, benefiting from the global proliferation of data and increasingly complex regulatory environments. This “category leader” status, combined with tight workflow integration, supports higher client retention and market share gains, boosting long-term recurring revenues.
Curious what kind of revenue growth, margin profile, and future earnings multiple need to line up to justify that gap to fair value? The full narrative lays out a detailed earnings path, share count assumptions, and required pricing power that go well beyond recent headlines.
Result: Fair Value of CA$265.98 (UNDERVALUED)
Have a read of the narrative in full and understand what’s behind the forecasts.
However, this hinges on AI tools gaining real traction and acquisitions bedding down, while faster moving rivals or integration missteps could quickly challenge that upbeat narrative.
Find out about the key risks to this Thomson Reuters narrative.
If you read this and come to a different conclusion, or simply want to test your own assumptions against the numbers, you can build a complete narrative yourself in just a few minutes with Do it your way.
A great starting point for your Thomson Reuters research is our analysis highlighting 3 key rewards and 2 important warning signs that could impact your investment decision.
If Thomson Reuters has you rethinking your watchlist, do not stop here. The real edge comes from lining up a few more high conviction ideas side by side.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Companies discussed in this article include TRI.TO.
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