Thomson Reuters (NYSE:TRI) may have reported higher sales and operating profit over the first quarter of 2023, but the positives were already priced in its share price, according to Canaccord.
As a result, analysts at the brokerage firm have downgraded its rating on the media company’s stock from Buy to Hold.
“While aggressive shareholder returns policies and strong execution operationally have driven up the price, we believe much of the good news is already priced in,” analysts wrote.
“We therefore prefer to wait for more compelling entry points.”
During 1Q, Thomson Reuters (NYSE:TRI) saw total revenue rise 4% to $1.74 billion, beating expectations, according to estimates from Refinitiv.
The company reported adjusted earnings of $0.82 cents per share, compared to analyst forecasts of $0.80.
Thomson Reuters (NYSE:TRI), which owns the Westlaw legal database, Reuters news agency, and the Checkpoint tax and accounting service, said organic revenue was up 7% for its "Big 3" segments: Legal Professionals, Corporates and Tax & Accounting Professionals.
The company reaffirmed its full-year 2023 financial forecasts but trimmed its 2023 total revenue growth forecast to 3% to 3.5% from 4.5% to 5% from the sale of a majority stake in legal business management software company Elite to TPG.
Despite the downgrade, Canaccord analysts are raising its target price on the stock to US$131 from $124, citing confidence around the company meeting its guidance and its relative share price performance over its peers.
Shares of Thomson Reuters were down 3.7% by midday Wednesday at US$125.84 in New York.
Contact Angela at angela@proactiveinvestors.com
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