On Friday, BMO Capital Markets adjusted its outlook on Thomson Reuters (NYSE:TRI) shares, raising the price target to C$235 from the previous C$222. The firm continues to recommend an Outperform rating for the stock. This decision follows Thomson Reuters' release of its first-quarter results, which exceeded market expectations in several key financial metrics.
The company reported a robust first quarter, with revenue, EBITDA, and earnings per share (EPS) surpassing analyst forecasts. Notably, Thomson Reuters achieved a remarkable margin of 42.7%, comfortably above the consensus estimate of 39.4%. Adjusted EPS for the quarter stood at $1.11, outpacing the expected $0.95.
Thomson Reuters also provided guidance for its future financial performance. The forecast for fiscal 2024 revenue was increased by approximately 0.25% at the midpoint. However, the second-quarter guidance indicates a slight moderation in organic revenue growth and a potential decrease in margins.
The company is nearing the completion of its $1 billion Normal Course Issuer Bid (NCIB), with around 80% already executed. Furthermore, Thomson Reuters has announced the sale of 11.7 million shares of London Stock Exchange Group (LON:LSEG), generating approximately $1.4 billion in gross proceeds.
BMO Capital anticipates that Thomson Reuters will utilize its substantial capital capacity for strategic acquisitions, focusing on bolt-on mergers and acquisitions to enhance its portfolio. The revised price target reflects the firm's confidence in Thomson Reuters' financial performance and strategic initiatives.
InvestingPro Insights
Thomson Reuters' recent financial achievements and strategic maneuvers have been positively recognized by BMO Capital Markets, and the data from InvestingPro echoes this sentiment. The company's market capitalization stands at a solid $73.55 billion, with a Price to Earnings (P/E) Ratio of 29.29, indicating investor confidence in its profitability.
Notably, Thomson Reuters has displayed a strong commitment to shareholder returns, as evidenced by a dividend growth of 16.97% over the last twelve months as of Q1 2024, and a dividend yield of 1.33%, which is particularly impressive considering the company has maintained dividend payments for an impressive 36 consecutive years—a testament to its financial stability and reliability.
InvestingPro Tips highlight that Thomson Reuters has a perfect Piotroski Score of 9, suggesting that the company's financial health is robust across multiple dimensions. Additionally, the management's aggressive share buyback strategy is a strong signal of their confidence in the company's intrinsic value. Investors looking to delve deeper into Thomson Reuters' financial nuances can explore further insights, with 19 more InvestingPro Tips available to guide their investment decisions. To gain access to these valuable insights, use coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription at InvestingPro.
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