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Vladimir Zernov
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Thomson Reuters

Thomson Reuters Video 04.05.21.

Thomson Reuters Stock Tests New Highs After Strong Q1 2021 Report

Shares of Thomson Reuters gained strong upside momentum and moved to record highs after the company released its first-quarter report.

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Thomson Reuters reported revenues of $1.58 billion and adjusted earnings of $0.58 per share, beating analyst estimates on both earnings and revenue. The company stated that its consumers were more confident about the economic recovery which boosted sales.

The company’s main business segments continued to perform well while Global Print remained under pressure. Thomson Reuters expects that Global Print’s revenues will decline by 4% – 7% in 2021 due to the negative impact of the coronavirus pandemic.

In the second quarter, Thomson Reuters expects to report revenue growth of 5.5% – 6.5% which will be driven by the strong performance of the “Big 3” segments (Legal Professionals, Corporates, Tax & Accounting Professionals). For the full year 2021, revenue is projected to grow by 3.5% – 4.0%, up from the previous guidance of 3.0% – 4.0%.

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What’s Next For Thomson Reuters?

The rapid economic rebound will remain the key driver for Thomson Reuters’ revenue growth in 2021. In addition, the company has recently decided to move Reuters News to the subscription model which may serve as the source of growth in the future although it remains to be seen whether any tangible results will be visible in 2021.

The stock is currently trading at more than 40 forward P/E for 2022. While many stocks are trading at rich valuation in the current market environment, such valuation typically depends on fast growth which is not the case for Thomson Reuters.

At the same time, the market believes in the growth story as the stock is showing strong performance after the quarterly report while the S&P 500 is under significant pressure. If the market sees more room for growth, especially for the subscription-based Reuters News, Thomson Reuters shares will have a good chance to settle above the $100 level.

For a look at all of today’s economic events, check out our economic calendar.

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