Thomson Reuters Stock 'Due For A Pause,' RBC Downgrades

In a report published Thursday, analysts at RBC Capital Markets downgraded

from Outperform to Sector Perform, while maintaining the price target at $41. The downgrade follows the recent surge in the company's share price. "While we remain positive on the ongoing turnaround story within F&R and supportive of the company's current capital allocation strategy, we believe the stock is due for a pause and we would be patient for a more timely entry point," the analysts explained. RBC Capital Markets expects some downside potential to Thomson Reuters' earnings "as 2015 progresses," impacted by the Thomson One migration and CAD/USD headwinds. At present, the analysts believe that the consensus estimates for 2015 for the company are too high, while those for 2016 are too low. According to the analysts, "Given the downside risk associated with FX and the timing/commercial adjustment impact of the Thomson One migration, we see the potential for earnings disappointment as 2015 progresses. Looking into 2016, we expect renewed positive operating leverage (the first since 2007/2008) to kick-in, the positive impact of which has historically been underestimated."