TRI

We rate THOMSON REUTERS CORP /CAN/ (TRI) as a Hold with a composite score of 51.6/100 at a current price of $89.20. The stock presents a mixed quantitative picture — neither compelling enough to warrant new accumulation nor weak enough to justify selling for existing holders. Our factors are split, and the overall profile suggests patience is warranted.

The rating is primarily driven by strength in quality (81th percentile) and value (78th percentile), which together account for the majority of the composite score. Offsetting weakness in momentum (16th percentile) and investment (54th percentile) tempers our overall conviction. We assign a Narrow Moat rating (63/100), Low uncertainty, and Exemplary capital allocation.

Key items to watch: momentum to confirm whether the current price trend has legs. Any material change in these dynamics could warrant a reassessment of our rating. The moat trend is stable, which suggests the competitive landscape is stable for now.

THOMSON REUTERS CORP /CAN/ holds a top-quartile position (#0 of 50) within the Manufacturing sector, based on our composite quantitative scoring across quality, value, momentum, and stability factors. The composite score of 51.6/100 places it at rank #1761 in our full 7,333-stock universe. With a $73.4B market capitalization, THOMSON REUTERS CORP /CAN/ operates at meaningful scale within the Manufacturing sector, providing competitive advantages in distribution, procurement, and customer reach.

Revenue is growing at 7%, though momentum at the 16th percentile suggests the market has not yet fully recognized this trajectory. This potential disconnect between fundamental improvement and market recognition could represent an opportunity for patient investors if the growth trend persists.

The margin cascade tells an important story: gross margins of 38% (-4.1pp vs sector) narrow to operating margins of 29% (+27.8pp vs sector) and net margins of 30.4%, yielding a gross-to-net conversion rate of 79%. This efficient conversion suggests well-controlled operating costs and limited margin leakage between the gross and net levels.

At a current price of $89.20, THOMSON REUTERS CORP /CAN/ appears undervalued relative to its fundamentals. Our value factor score of 78/100 reflects a composite assessment across multiple valuation metrics including price-to-earnings, price-to-book, EV/EBITDA, and price-to-sales ratios relative to both sector peers and the broader market. The stock screens as attractively priced on a majority of these measures, suggesting the market may be underappreciating the underlying fundamentals.

The stock currently trades at EV/EBITDA of 3.9x (discounted to peers), P/B of 3.1x, P/S of 1.3x. We evaluate these multiples in the context of both absolute levels and sector-relative positioning to form our valuation view.

We assign a Low uncertainty rating to THOMSON REUTERS CORP /CAN/. The company exhibits strong financial stability with a beta of 0.49, conservative leverage (0% D/E), and a stability factor in the 70th percentile. The predictable nature of the business model and solid financial position reduce the range of potential outcomes, giving us confidence in our fair value estimate.

Specific risk factors that inform our assessment include: low beta of 0.49 — while defensive, this may indicate limited upside participation in bull markets. Each of these factors independently widens the distribution of potential outcomes, and in combination they create a risk profile that demands careful position sizing. The stability factor at the 70th percentile and quality factor at the 81th percentile provide a quantitative summary of the overall risk landscape.

Key risk mitigants include: conservative leverage (0% D/E) limits balance sheet risk; above-average stability (70th percentile) suggests predictable business dynamics; large-cap scale ($73.4B) provides resilience. These factors partially offset the identified risks and provide downside protection in adverse scenarios. On balance, the risk-reward profile is favorable for long-term investors.

We rate THOMSON REUTERS CORP /CAN/'s capital allocation as Exemplary. Management demonstrates a strong track record of balancing reinvestment with shareholder returns, evidenced by returns on equity of 73.5%, disciplined leverage (0% D/E), best-in-class net margins of 30.4%. Exemplary allocators typically generate returns on equity above 20% while maintaining debt-to-equity below 50% — THOMSON REUTERS CORP /CAN/ meets this high bar.

The balance sheet remains conservatively managed, providing financial flexibility for opportunistic investments while maintaining a margin of safety for shareholders. The company returns capital via a 1.35% dividend yield, and the combination of 47.9% return on assets and controlled leverage suggests management is deploying capital at rates well above the cost of capital — the hallmark of exemplary stewardship.

In summary, THOMSON REUTERS CORP /CAN/ receives a Hold rating with a composite score of 51.6/100 (rank #1761 of 7,333). Our quantitative framework assigns a Narrow Moat (63/100, trend: stable), Low uncertainty, and Exemplary capital allocation. The average factor score across quality, value, momentum, stability, and investment is 60/100.

Our analysis supports a neutral stance on THOMSON REUTERS CORP /CAN/. While the quantitative profile is not weak enough to warrant selling, it lacks the multi-factor strength required for a buy recommendation. Existing holders should maintain positions and monitor for catalysts — either fundamental improvement or valuation compression — that would shift the risk-reward balance.