Thomson Reuters (TSX:TRI) Valuation Check After New AI Research Lab and Legal Tech Toolkit Launch

Thomson Reuters (TSX:TRI) is back in focus after unveiling a multi year Frontier AI research lab with Imperial College London, alongside a new Value Alignment Strategic Toolkit for in house legal teams navigating rapid technological change.

See our latest analysis for Thomson Reuters.

Those AI and legal tech moves arrive after a tough stretch for the stock, with a roughly 22.9 percent 3 month share price return decline. At the same time, a still solid 5 year total shareholder return near doubling suggests long term confidence remains, even as short term momentum has cooled.

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With the shares down sharply this year yet still nearly doubled over five years, and trading at a sizeable discount to analyst targets and intrinsic value estimates, is this renewed AI push a fresh buying opportunity, or is the market already pricing in future growth?

Most Popular Narrative: 30.3% Undervalued

With Thomson Reuters closing at CA$186.64 against a narrative fair value near CA$267.74, the valuation case leans firmly toward upside potential.

The analysts have a consensus price target of CA$274.103 for Thomson Reuters based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of CA$308.28, and the most bearish reporting a price target of just CA$232.96.

Read the complete narrative.

Want to see what justifies paying a premium multiple for a steady growing information giant? The crux is in the earnings ramp, margin glide path, and one bold valuation assumption that could reset expectations. Curious how those pieces fit together into that punchy fair value?

Result: Fair Value of CA$267.74 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, intensifying AI competition and slower than expected client adoption could pressure pricing power and delay the earnings inflection implied in today’s valuation.

Find out about the key risks to this Thomson Reuters narrative.

Another Angle on Valuation

On earnings multiples, Thomson Reuters looks anything but cheap. It trades on a 34.1 times price to earnings ratio versus about 29.1 times for peers and a fair ratio of 32 times, suggesting limited margin of safety if growth or AI adoption disappoint.

See what the numbers say about this price — find out in our valuation breakdown.

Build Your Own Thomson Reuters Narrative

If you see the story differently or want to dig into the numbers yourself, you can craft a complete view in minutes: Do it your way.

A great starting point for your Thomson Reuters research is our analysis highlighting 3 key rewards and 2 important warning signs that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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