TRI
Thomson Reuters Corporation
$123.17
Stable Earnings Power
40%
P/Adj-EPS × Normalized Multiple
Strong
·
Conviction
Overvalued
Trading 67.9% above fair value
You pay
$123.17
Bear
$58.68
Fair
$73.35
Bull
$88.02
Bear
$58.68
-52.4%
$4.89 × 12x P/E
Fair
$73.35
-40.4%
$4.89 × 15x P/E
Bull
$88.02
-28.5%
$4.89 × 18x P/E
Adjust Assumptions
15.0x
4.89$
Key Value Driver
Normalized P/E multiple (15x base case)
Implied Market Multiple
25.2x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (27 analysts)
$133.25
Divergence from AlphaVal
45%
Summary
Applying a 15x P/E to adjusted EPS of $4.89, the base-case value is $73.35 per share.
Warnings
The company's reported profits differ from official accounting profits by 44%. Check what costs are being left out of the adjusted number.
The company pays out 100% of its profits as dividends. That leaves little cushion — the dividend could be cut if business slows down.
Wall Street's average price target is $133.25 (from 27 analysts). Our estimate is 45% below the consensus -- consider that gap carefully.
Key Risks
- Growth DCF inappropriate — terminal value assumptions dominate
- EV/EBITDA misleading for regulated businesses where capex is mandated
- Regulatory risk is a fat tail not visible in normal multiples