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UPDATE: Canaccord Initiates Thomson Reuters with Buy on Substantial Margin Expansion Potential

Related TRI
UPDATE: Thomson Reuters Q3 Profit Meets Estimates
Earnings Scheduled For October 30, 2014

In a report published Monday, Canaccord Genuity analyst Aravinda Galappatthige initiated coverage on Thomson Reuters Corporation (NYSE: TRI) with a Buy rating and $36.00 price target.

In the report, Galappatthige noted, “We believe TRI has substantial margin expansion potential post 2013, as its single platform strategy in the Financial & Risk (F&R) segment (half of corporate EBITDA) plays out. We believe a 500 bp expansion (translates to over $340M in EBITDA) is achievable in F&R over a three-year period post 2013. This together with a recovery in organic revenue growth in F&R driven by the proliferation of its new desktop product Eikon, we expect, would lead to a phase of higher EBITDA and FCF growth post 2013. Consequently, we believe that TRI's EBITDA growth outlook is transitioning from flat or low single digits to a mid-single digit (we believe 6% post 2013) growth scenario. Our projections do not factor in a change in growth profile in Legal, the other major division of TRI.”

Thomson Reuters Corporation closed on Friday at $32.61.

Latest Ratings for TRI

DateFirmActionFromTo
Nov 2014JP MorganMaintainsNeutral
Jul 2014Credit SuisseMaintainsOutperform
Jul 2014Deutsche BankMaintainsHold

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Posted-In: Canaccord GenuityAnalyst Color Initiation Analyst Ratings

 

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