Nucor earnings beat by $0.08, revenue fell short of estimates
On Thursday, Barclays (LON:BARC) analyst Manav Patnaik increased the price target on Thomson Reuters (NASDAQ:TRI) shares to $210 from the previous $200, while maintaining an Overweight rating on the stock. Patnaik’s update came after Thomson Reuters reported a solid quarter, with shares trading approximately flat compared to the S&P 500’s 1.3% gain at around 2:15 pm ET. The company’s use of GenAI-enabled products has risen to 20% of its total mix, up from 18% in the last quarter.
Thomson Reuters saw a slight decline in reported revenue, attributed mainly to a greater impact from product sunsets and divestitures, some transactional headwinds, and more adverse foreign exchange rates than Barclays had anticipated. Despite these challenges, the company maintained strong financial metrics, with InvestingPro data showing a healthy 6.8% revenue growth and an impressive gross profit margin of 38.9%. The company’s recurring revenue growth remained robust, and profit margins were strong, even after adjusting for some expense timing shifts. InvestingPro’s comprehensive analysis reveals an excellent Financial Health Score of 3.01, labeled as "GREAT." Barclays expects the growth trajectory of Thomson Reuters to continue upward, with the potential for approximately 100 basis points of annual organic margin expansion as the growth of its Big 3 segments approaches or surpasses 9%.
Despite concerns about the company’s exposure to government contracts, Thomson Reuters reported an acceleration to 9% growth in this segment. While minor headwinds to growth are anticipated throughout the year due to some non-renewals, these are seen as manageable when weighed against the strong growth drivers present in other areas of the business. Notably, the company has maintained dividend payments for 37 consecutive years, demonstrating long-term financial stability. For deeper insights into Thomson Reuters’ financial health and growth prospects, investors can access the detailed Pro Research Report available on InvestingPro, which covers over 1,400 top US stocks.
Patnaik referenced discussions from last year with Thomson Reuters’ CEO and CFO, expressing a continued bullish stance on the company’s innovation opportunities and the significant improvement in asset quality following a series of acquisitions and divestitures. Barclays plans to delve further into these topics during a meeting with the company’s management at the upcoming London ASC next week.
In other recent news, Thomson Reuters has reported a strong start to 2025, with a 6% organic revenue increase in the first quarter, primarily driven by its legal, corporate, and tax & accounting divisions. The company’s adjusted earnings per share (EPS) saw a slight rise to $1.12 from $1.11 year-over-year. Thomson Reuters has reaffirmed its full-year 2025 organic revenue growth guidance of 7-7.5% and increased its annual dividend by 10% to $2.38 per share. Additionally, the company completed the acquisition of SafeSend for $600 million, which is integrating smoothly. Analysts noted the company’s resilience, supported by over 80% recurring revenues and strategic investments in AI-driven solutions. The firm also highlighted the successful launch of its Co-Counsel AI assistant, contributing to the growth in its core segments. With a focus on innovation and enterprise-wide pricing strategies, Thomson Reuters continues to position itself for sustained growth.
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