Goldman Sachs Comments On TRI Analyst Day
Goldman Sachs is providing a few comments on Thomson Reuters Corporation's (NYSE: TRI) analyst day.
(1) “The focus is on the right places. Common platforms, aggressively resourcing the turnaround of the investment management (IM) business, and staking claim on emerging market economies,” Goldman Sachs writes.
(2) “Breaking in Eikon and expanding addressable base. A commitment to 2H2011 improvement and product enhancements for the IM business is helpful – and we sense competitive reasons for not disclosing product enhancements more explicitly. Full migration of products to Eikon will finish by 2014, but rollouts of today's Eikon in some large clients are drawn out by a give and take between banks' IT rollout schedules and requests for tuning of features such as compliance monitoring. This breaking in is the threshold to meaningful displacements of competitive products. We think a portion of Bloomberg users in large banks are over-served by its one product/one price model but have not had a credible single application alternative from TRI in until Eikon.
(3) “Long-term goals in line, but we'd like an above average year. Mid-single-digit revenue growth and approaching a 25% operating margin are consistent with our published estimates; we see the margin goal possible in three years' time if macro trends are constructive. But we sense investors want to see a period of better than mid-single-digit growth – something possible when Eikon is broken in among large clients and regulatory uncertainties ease. This appears a hope for next year or beyond.”
Thomson Reuters closed Thursday at $39.24.
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