J.P. Morgan Lowers TRI Target To $40 From $43
February 11, 2011 9:07 AM
J.P. Morgan is lowering its PT on shares of Thomson Reuters (NYSE: TRI) to $40 from $43.
“Q4,10 results were below estimates with revenues +3% (+2% organic and ex currency) and EBITA -2%. “Adjusted” EPS totaled $0.43 v. $0.44 a year-ago,” J.P. Morgan writes. “Segment margins were broadly light, while corporate costs were above our numbers. The 2011 outlook points to revenues up 4-6% (in-line with JPM) but EBITA margin up just ~300bps (v. our prior +410bp assumption) despite a big drop in Reuters integration costs (~200bps of the yo- y improvement).
“Markets margins are trending nicely, but Legal is being muted by product mix and other factors (including recent M&A, as well as D&A from newer products that are now hitting the P&L). We struggle to get too excited about the stock at current levels.”
Thomson Reuters closed Thursday at $40.09.
