Analysts
Citigroup raises Thomson Reuters to buy
Monday 25 January 2010
Citigroup raised Thomson Reuters to buy from hold. Among 27 analysts following Thomson Reuters, three now rate the stock a buy, seven outperform, 11 hold, three sell and three have no opinion.
TRI.N closed at $32.37, 1.98 per cent higher, TRI.TO at C$34.22, up 1.85 per cent.
The upgrade coincided with the launch of a new service aimed at high-frequency traders in London and Chicago. Thomson Reuters NewsScope Direct will provide the fastest access to market-moving machine readable news content. The company said its microsecond delivery enables clients to buy and sell financial instruments before the information moves the market.
● SOURCE Citigroup
TRI.N closed at $32.37, 1.98 per cent higher, TRI.TO at C$34.22, up 1.85 per cent.
The upgrade coincided with the launch of a new service aimed at high-frequency traders in London and Chicago. Thomson Reuters NewsScope Direct will provide the fastest access to market-moving machine readable news content. The company said its microsecond delivery enables clients to buy and sell financial instruments before the information moves the market.
● SOURCE Citigroup
Bank of America initiates TRI coverage, sees $39
Wednesday 06 January 2010
Bank of America initiated analyst coverage on Thomson Reuters with a Buy rating and set a price target of $39.
In November, Barclays initiated coverage with an “equal weight” rating.
TRI.N traded three per cent higher at $33.35 in New York on Wednesday. In Toronto the share was 2.5 per cent higher at C$34.47.
● SOURCE Street Insider
In November, Barclays initiated coverage with an “equal weight” rating.
TRI.N traded three per cent higher at $33.35 in New York on Wednesday. In Toronto the share was 2.5 per cent higher at C$34.47.
● SOURCE Street Insider
UBS raises Thomson Reuters to ‘buy’
Friday 06 November 2009
UBS upgraded Thomson Reuters to "buy" from "sell" and substantially lifted its price target on the stock, saying the company was well positioned for sustainable growth despite uncertainties in the near term.
In its Q3 results on Thursday, Thomson Reuters reported quarterly revenue fell in its markets and legal businesses as customers cut costs in the wake of the financial crisis, but it said the worst was over.
"We believe investors will see through the lagging financial results and focus on the recovery of the underlying business drivers," analyst Phillip Huang said in a note. He raised his price target on the stock to $37.50 from $23.50.
Huang said he expected the underlying drivers for the business to notably improve over the next 12 months due to increasing visibility of stabilisation in the headcount for the financial and legal sectors.
There were uncertainties in the near term, however, as he expected the company's financial results to remain volatile.
"We have yet to see the full impact of the downturn reflected in the financial results for Markets and Legal given the late cycle nature of the subscription business," Huang said. Thomson Reuters shares are attractive despite these uncertainties because the rewards outweigh the risks.
In New York on Friday, Thomson Reuters shares were slightly lower at $32.07.
● SOURCE Reuters
In its Q3 results on Thursday, Thomson Reuters reported quarterly revenue fell in its markets and legal businesses as customers cut costs in the wake of the financial crisis, but it said the worst was over.
"We believe investors will see through the lagging financial results and focus on the recovery of the underlying business drivers," analyst Phillip Huang said in a note. He raised his price target on the stock to $37.50 from $23.50.
Huang said he expected the underlying drivers for the business to notably improve over the next 12 months due to increasing visibility of stabilisation in the headcount for the financial and legal sectors.
There were uncertainties in the near term, however, as he expected the company's financial results to remain volatile.
"We have yet to see the full impact of the downturn reflected in the financial results for Markets and Legal given the late cycle nature of the subscription business," Huang said. Thomson Reuters shares are attractive despite these uncertainties because the rewards outweigh the risks.
In New York on Friday, Thomson Reuters shares were slightly lower at $32.07.
● SOURCE Reuters
Takeover ill-timed says analyst, but upgrades TR shares
Wednesday 23 September 2009
Thomson’s acquisition of Reuters was ill-timed, investment bank Piper Jaffray said in a note accompanying an upgrade from Underweight to Neutral for the stock.
"In retrospect, Thomson's acquisition of Reuters was ill-timed. Thomson ‘doubled-down’ on the financial services industry at a time when industry dynamics were rapidly deteriorating, translating into significant pressure on revenues and earnings,” Piper Jaffray’s analyst said.
“That said, execution has been solid, with cost efficiencies beating expectations and translating into an upward bias in estimates despite the challenging industry backdrop...We like Thomson Reuters' leadership position in the global information service market, its strong record of execution and its appealing business model. With the worst of the financial industry downcycle likely behind us, we are upgrading our rating on Thomson to Neutral."
Deutsche Bank upgraded Thomson Reuters from Sell to Buy nine days ago and said that with two consecutive quarters of net sales in the markets division the mechanics of the subscription model means a negative Q3 figure is a given, and probably so for the first half of 2010.
Margins in Legal were guided to fall modestly, breaking a long pattern of growth, and the company was flagging slower revenue growth in Legal in the second half, it said. “The company is sounding a cautious note, but in fact the trough now looks sooner and shallower than we expected. But also a shallower trough and stronger turn; consensus too low.
“All the above is rather grim and the last year has seen management gradually back away from the view that TR could get through this slump without revenues falling. That said, we now expect the trough in Markets to be shallower / shorter than we thought likely in late 2008...”
Goldman Sachs initiated its analyst coverage on Thomson Reuters with a Neutral rating and $38.30 price target following the unification of the dual listing. It said that while Thomson Reuters is one of the strongest international professional publishing companies it trades at a 35 per cent premium to most peers.
● SOURCE Street Insider
"In retrospect, Thomson's acquisition of Reuters was ill-timed. Thomson ‘doubled-down’ on the financial services industry at a time when industry dynamics were rapidly deteriorating, translating into significant pressure on revenues and earnings,” Piper Jaffray’s analyst said.
“That said, execution has been solid, with cost efficiencies beating expectations and translating into an upward bias in estimates despite the challenging industry backdrop...We like Thomson Reuters' leadership position in the global information service market, its strong record of execution and its appealing business model. With the worst of the financial industry downcycle likely behind us, we are upgrading our rating on Thomson to Neutral."
Deutsche Bank upgraded Thomson Reuters from Sell to Buy nine days ago and said that with two consecutive quarters of net sales in the markets division the mechanics of the subscription model means a negative Q3 figure is a given, and probably so for the first half of 2010.
Margins in Legal were guided to fall modestly, breaking a long pattern of growth, and the company was flagging slower revenue growth in Legal in the second half, it said. “The company is sounding a cautious note, but in fact the trough now looks sooner and shallower than we expected. But also a shallower trough and stronger turn; consensus too low.
“All the above is rather grim and the last year has seen management gradually back away from the view that TR could get through this slump without revenues falling. That said, we now expect the trough in Markets to be shallower / shorter than we thought likely in late 2008...”
Goldman Sachs initiated its analyst coverage on Thomson Reuters with a Neutral rating and $38.30 price target following the unification of the dual listing. It said that while Thomson Reuters is one of the strongest international professional publishing companies it trades at a 35 per cent premium to most peers.
● SOURCE Street Insider
Analysts' expectations of Q2 results
Wednesday 05 August 2009
Thomson Reuters reports its Q2 results on Thursday, but analysts are already weighing in on what they expect. The market consensus is C$3.3 billion in revenue and C$.43 earnings per share.
● Drew McReynolds, RBC Capital Markets analyst, has pegged revenue for the quarter at C$3.28 billion with cash EPS of C$.44. He expects a less severe trough in organic revenue growth in markets in the first half of 2010 of -6.9 per cent from -8.5 per cent and further improvement in financial sector sentiment, keeping a “outperform” rating on the company by raising the price target to $37 from $34.
● Phillip Huang, UBS analyst, says the key focus should be on the Markets division, which is "late cycle" and should move into negative territory after flat growth in the first quarter. "Thomson Reuters has rallied due to the consolidation," he said in a note to clients. "However, we believe organic revenue growth for Thomson Reuters is later cycle than the market expects." He expects an EPS at 40 cents and maintains a “sell” rating on the company, with a price target of $23.50.
● Paul Steep, analyst with Scotia Capital, is far more bullish despite believing the second quarter of 2009 could be the company's "most challenging quarter since the credit crisis began" as IT budgets have been frozen in the first half of the year. "Our estimates remain significantly ahead of consensus, reflecting the significant upside of integration synergies in 2011 and beyond," he said in a note. "We continue to expect the firm to build on the quick integration wins delivered in 2008." He also forecasts revenues of C$3.2 billion and EPS of C$.44, but has a target price of C$47 on a “sector outperform” rating.
● SOURCE Seeking Alpha
● Drew McReynolds, RBC Capital Markets analyst, has pegged revenue for the quarter at C$3.28 billion with cash EPS of C$.44. He expects a less severe trough in organic revenue growth in markets in the first half of 2010 of -6.9 per cent from -8.5 per cent and further improvement in financial sector sentiment, keeping a “outperform” rating on the company by raising the price target to $37 from $34.
● Phillip Huang, UBS analyst, says the key focus should be on the Markets division, which is "late cycle" and should move into negative territory after flat growth in the first quarter. "Thomson Reuters has rallied due to the consolidation," he said in a note to clients. "However, we believe organic revenue growth for Thomson Reuters is later cycle than the market expects." He expects an EPS at 40 cents and maintains a “sell” rating on the company, with a price target of $23.50.
● Paul Steep, analyst with Scotia Capital, is far more bullish despite believing the second quarter of 2009 could be the company's "most challenging quarter since the credit crisis began" as IT budgets have been frozen in the first half of the year. "Our estimates remain significantly ahead of consensus, reflecting the significant upside of integration synergies in 2011 and beyond," he said in a note. "We continue to expect the firm to build on the quick integration wins delivered in 2008." He also forecasts revenues of C$3.2 billion and EPS of C$.44, but has a target price of C$47 on a “sector outperform” rating.
● SOURCE Seeking Alpha
Delisting disappoints UK investors and analysts
Tuesday 23 June 2009
UK investors and analysts are disappointed at Thomson Reuters' plan to cancel its London Stock Exchange listing, Reuters reported.
Monday’s board decision prompted a jump in the shares on Tuesday, but the rally was tempered by fears some large British shareholders will have to cut or sell their stakes.
Chief executive Tom Glocer said he hoped UK shareholders – only five per cent of the company's combined shareholder base – would retain their investments after the reorganisation, but major institutional investors are likely to sell many or all of their shares, given the funds they manage are UK focused.
Reuters reported: "Tom Glocer was good enough to come and see me yesterday afternoon together with the two other remaining institutional shareholders in London, and I am bitterly disappointed," said one top-10 institutional investor who wished to remain anonymous.
The fund manager said he had hoped the company would leave it five years before reaching a decision on its listings.
"The dozy old UK institutions and sell-side analysts are only just realising that Thomson Reuters is a much better company than they thought," he said. "I think investors would have really come back to this one ... It's a real shame."
The company said the fragmentation in its share structure was deterring some investors.
Analysts at Numis Securities said they could see the benefits the simpler shareholder structure would bring but that they too were disappointed by the move.
"We have been firm supporters of the group, which was one of our key picks in Media 2009, and are therefore greatly saddened to see the delisting," they wrote, adding that many UK institutional investors would likely have to sell their stakes.
Numis had a “hold” rating on the London-listed stock prior to news of the reorganisation but upgraded it to “add” in order to reflect the discount relative to the US shares.
UBS analysts said any upside to the shares may be capped by the fact some institutional shareholders would have to sell stock and were less enthusiastic about the company's prospects, retaining a "sell" rating.
"We continue to believe the the fundamental value of the group overall remains too high," UBS analyst Phillip Huang said in a note. "We would expect to see evidence of deteriorating momentum near future, which combined with imminent increased liquidity, could put pressure on the Corp valuation."
Meanwhile, the longstanding valuation spread between the stocks has already dropped to less than four per cent from 9.3 per cent and will continue to narrow, Huang said.
"[There] may be some offset from PLC holders selling if unable to hold Corp," he said.
In any event, London shares are likely to be driven down in value by virtue of the delisting announcement alone, so Huang has reiterated his "sell" rating and kept his price target of $23.50.
Todd Bourell, a partner at hedge fund ValueAct Capital, which owns 12 million Thomson Reuters shares in London and is one of the company's largest shareholders, said Thomson Reuters' London listing had become problematic for the company.
"The fact that the stock is irrationally undervalued in London is putting a drag on the value of the stock in New York and Toronto," Bourell said.
Canada's Thomson family is the largest shareholder of Thomson Reuters and holds a 55 per cent voting interest.
The Financial Times blamed “a more parochial investment approach” for bogging down Thomson Reuters.
“For a company that makes much of its money from professionals in globalised markets moving capital across borders at high speed, Thomson Reuters became oddly bogged down by a more parochial investment approach,” it said.
When Thomson Corp swooped on Reuters in the summer of 2007, it knew that some UK investors would have trouble holding the paper in its half-cash, half-shares £7.9 billion offer, the FT said.
To avoid a large scale defection of domestic institutions, it turned to a well-worn structure: the dual-listed company, or DLC.
The theory was that shareholders on either side of the Atlantic should be allowed to trade instruments of identical value, taking currency into account, on the local market of their choice.
Reuters’ London shares initially traded at a discount to Thomson’s North American listings until the deal completed in April 2008.
Such gaps are typical with uncompleted deals, as hedge funds bet on possible regulatory delays and other hurdles. Unusually, however, the discount did not disappear when the deal closed.
Over the year, the London line traded on average at a 15 per cent discount to the Toronto quote.
An instrument designed to smooth the takeover instead became an unexpected illustration of the inefficiencies that still exist in modern global markets, the FT said.
The fact that the DLC structure failed to behave as expected was described on Monday by one person close to the company as “irrational”, but analysts identify a number of reasons.
One factor was that the high concentration of the Thomson family’s stake in Canada limited liquidity in Toronto, benefiting the price by restricting opportunities for borrowing stock to sell short.
The simplest explanation, however, may be that UK investors have taken a more bearish stance towards the company, the FT said.
“Their North American peers, many in the company believe, focus less obsessively on the financial data business that serves hard-hit Wall Street and City of London traders and give more weight to its legal, scientific, healthcare, tax and accounting operations.”
For the group, a unified capital structure opens up the possibility of more stock-based acquisitions once turbulence subsides. Having two differently valued instruments could have complicated potential takeovers, especially while more than $5 billion of liquidity was effectively trapped in a pool outside North America.
According to Glocer: “In an age where our markets are global and electronic, brought that way in part because of us at Thomson Reuters, where these shares are traded is much less important to me than where our customers, employees and footprint are.”
● SOURCE Reuters | Financial Post | Financial Times
Monday’s board decision prompted a jump in the shares on Tuesday, but the rally was tempered by fears some large British shareholders will have to cut or sell their stakes.
Chief executive Tom Glocer said he hoped UK shareholders – only five per cent of the company's combined shareholder base – would retain their investments after the reorganisation, but major institutional investors are likely to sell many or all of their shares, given the funds they manage are UK focused.
Reuters reported: "Tom Glocer was good enough to come and see me yesterday afternoon together with the two other remaining institutional shareholders in London, and I am bitterly disappointed," said one top-10 institutional investor who wished to remain anonymous.
The fund manager said he had hoped the company would leave it five years before reaching a decision on its listings.
"The dozy old UK institutions and sell-side analysts are only just realising that Thomson Reuters is a much better company than they thought," he said. "I think investors would have really come back to this one ... It's a real shame."
The company said the fragmentation in its share structure was deterring some investors.
Analysts at Numis Securities said they could see the benefits the simpler shareholder structure would bring but that they too were disappointed by the move.
"We have been firm supporters of the group, which was one of our key picks in Media 2009, and are therefore greatly saddened to see the delisting," they wrote, adding that many UK institutional investors would likely have to sell their stakes.
Numis had a “hold” rating on the London-listed stock prior to news of the reorganisation but upgraded it to “add” in order to reflect the discount relative to the US shares.
UBS analysts said any upside to the shares may be capped by the fact some institutional shareholders would have to sell stock and were less enthusiastic about the company's prospects, retaining a "sell" rating.
"We continue to believe the the fundamental value of the group overall remains too high," UBS analyst Phillip Huang said in a note. "We would expect to see evidence of deteriorating momentum near future, which combined with imminent increased liquidity, could put pressure on the Corp valuation."
Meanwhile, the longstanding valuation spread between the stocks has already dropped to less than four per cent from 9.3 per cent and will continue to narrow, Huang said.
"[There] may be some offset from PLC holders selling if unable to hold Corp," he said.
In any event, London shares are likely to be driven down in value by virtue of the delisting announcement alone, so Huang has reiterated his "sell" rating and kept his price target of $23.50.
Todd Bourell, a partner at hedge fund ValueAct Capital, which owns 12 million Thomson Reuters shares in London and is one of the company's largest shareholders, said Thomson Reuters' London listing had become problematic for the company.
"The fact that the stock is irrationally undervalued in London is putting a drag on the value of the stock in New York and Toronto," Bourell said.
Canada's Thomson family is the largest shareholder of Thomson Reuters and holds a 55 per cent voting interest.
The Financial Times blamed “a more parochial investment approach” for bogging down Thomson Reuters.
“For a company that makes much of its money from professionals in globalised markets moving capital across borders at high speed, Thomson Reuters became oddly bogged down by a more parochial investment approach,” it said.
When Thomson Corp swooped on Reuters in the summer of 2007, it knew that some UK investors would have trouble holding the paper in its half-cash, half-shares £7.9 billion offer, the FT said.
To avoid a large scale defection of domestic institutions, it turned to a well-worn structure: the dual-listed company, or DLC.
The theory was that shareholders on either side of the Atlantic should be allowed to trade instruments of identical value, taking currency into account, on the local market of their choice.
Reuters’ London shares initially traded at a discount to Thomson’s North American listings until the deal completed in April 2008.
Such gaps are typical with uncompleted deals, as hedge funds bet on possible regulatory delays and other hurdles. Unusually, however, the discount did not disappear when the deal closed.
Over the year, the London line traded on average at a 15 per cent discount to the Toronto quote.
An instrument designed to smooth the takeover instead became an unexpected illustration of the inefficiencies that still exist in modern global markets, the FT said.
The fact that the DLC structure failed to behave as expected was described on Monday by one person close to the company as “irrational”, but analysts identify a number of reasons.
One factor was that the high concentration of the Thomson family’s stake in Canada limited liquidity in Toronto, benefiting the price by restricting opportunities for borrowing stock to sell short.
The simplest explanation, however, may be that UK investors have taken a more bearish stance towards the company, the FT said.
“Their North American peers, many in the company believe, focus less obsessively on the financial data business that serves hard-hit Wall Street and City of London traders and give more weight to its legal, scientific, healthcare, tax and accounting operations.”
For the group, a unified capital structure opens up the possibility of more stock-based acquisitions once turbulence subsides. Having two differently valued instruments could have complicated potential takeovers, especially while more than $5 billion of liquidity was effectively trapped in a pool outside North America.
According to Glocer: “In an age where our markets are global and electronic, brought that way in part because of us at Thomson Reuters, where these shares are traded is much less important to me than where our customers, employees and footprint are.”
● SOURCE Reuters | Financial Post | Financial Times
Reuters to beat Bloomberg out of global crisis - FT
Monday 27 April 2009
Reuters may fare better than Bloomberg in the current financial crisis, the Financial Times said on Monday.
Thanks to a technological shift, instead of just wholesaling news and data, wire services can in theory also sell it direct to consumers via the internet or mobile applications. But advertising is scarce and such retail schemes, which cannibalise wholesale revenues, have floundered in the past, it said.
A bigger problem is the banking crisis. Peter Grauer, Bloomberg’s chairman, believes the financial services industry will cut its information spending by 20 per cent this year.
“Such shrinkage offers a replay of the slugging match during the dotcom downturn, when Bloomberg got the better of Reuters, its duopolistic financial information rival,” the FT said.
“This time Reuters may fare better. Bloomberg can’t count on the hedge funds it courted in the 2000s to pick up the slack. It is dominant in fixed-income, not the best place to be; Reuters is stronger in forex and commodities. Furthermore, Thomson Reuters’ legal and medical information provide extra ballast. Bloomberg’s largely one-trick business model, renting terminals at $1,590 per month, hinges on body count. Thanks to savings from the merger, Thomson Reuters shares trade at 15 times forecast earnings, a 32 per cent premium to its peers. Bad news can only await such a high wire rating.”
Analysts expect the global financial crisis to have profound consequences for the industry, but what those will be is far from obvious, the FT said.
Lengthy subscriptions mean cuts by customers take time to filter through, and even in the quarter when Lehman Brothers collapsed, transactional revenues rose thanks to volatility in commodity and foreign exchange markets.
“Only now, as first-quarter figures begin to come through, are investors watching anxiously for the early signs of the credit crunch’s impact. Citigroup analysts noted last week that transaction revenues could be down 40 per cent,” the FT said.
There is considerable uncertainty about the extent to which financial companies will retain overlapping, or similar services given the pressure on services. Although at the same time heightened scrutiny on valuations and increased regulatory demands could help support the industry.
Not all are affected equally. Citigroup argued that Thomson Reuters could fare better than Bloomberg because the latter had been more exposed to harder-hit fixed-income and asset-backed securities traders and hedge funds.
One analyst, who would not be named, said Bloomberg was taking an “aggressively proactive” approach to persuading customers to keep their terminals.
The analyst told the FT that Thomson Reuters, which is less dependent on terminal sales than in past downturns, was fighting back ahead of launching its first common platform since the former Thomson Financial and Reuters businesses combined a year ago.
Thomson Reuters’ London-listed shares are now at the same level as last May. Over the same period the FTSE has dropped 35 per cent.
The London shares closed on Monday at 1,705 pence, 0.99 per cent below their 52-week high of 1,722 set nine trading days ago on 14 April.
● SOURCE Financial Times
Thanks to a technological shift, instead of just wholesaling news and data, wire services can in theory also sell it direct to consumers via the internet or mobile applications. But advertising is scarce and such retail schemes, which cannibalise wholesale revenues, have floundered in the past, it said.
A bigger problem is the banking crisis. Peter Grauer, Bloomberg’s chairman, believes the financial services industry will cut its information spending by 20 per cent this year.
“Such shrinkage offers a replay of the slugging match during the dotcom downturn, when Bloomberg got the better of Reuters, its duopolistic financial information rival,” the FT said.
“This time Reuters may fare better. Bloomberg can’t count on the hedge funds it courted in the 2000s to pick up the slack. It is dominant in fixed-income, not the best place to be; Reuters is stronger in forex and commodities. Furthermore, Thomson Reuters’ legal and medical information provide extra ballast. Bloomberg’s largely one-trick business model, renting terminals at $1,590 per month, hinges on body count. Thanks to savings from the merger, Thomson Reuters shares trade at 15 times forecast earnings, a 32 per cent premium to its peers. Bad news can only await such a high wire rating.”
Analysts expect the global financial crisis to have profound consequences for the industry, but what those will be is far from obvious, the FT said.
Lengthy subscriptions mean cuts by customers take time to filter through, and even in the quarter when Lehman Brothers collapsed, transactional revenues rose thanks to volatility in commodity and foreign exchange markets.
“Only now, as first-quarter figures begin to come through, are investors watching anxiously for the early signs of the credit crunch’s impact. Citigroup analysts noted last week that transaction revenues could be down 40 per cent,” the FT said.
There is considerable uncertainty about the extent to which financial companies will retain overlapping, or similar services given the pressure on services. Although at the same time heightened scrutiny on valuations and increased regulatory demands could help support the industry.
Not all are affected equally. Citigroup argued that Thomson Reuters could fare better than Bloomberg because the latter had been more exposed to harder-hit fixed-income and asset-backed securities traders and hedge funds.
One analyst, who would not be named, said Bloomberg was taking an “aggressively proactive” approach to persuading customers to keep their terminals.
The analyst told the FT that Thomson Reuters, which is less dependent on terminal sales than in past downturns, was fighting back ahead of launching its first common platform since the former Thomson Financial and Reuters businesses combined a year ago.
Thomson Reuters’ London-listed shares are now at the same level as last May. Over the same period the FTSE has dropped 35 per cent.
The London shares closed on Monday at 1,705 pence, 0.99 per cent below their 52-week high of 1,722 set nine trading days ago on 14 April.
● SOURCE Financial Times
Thomson Reuters may post strong results, say analysts
Friday 16 January 2009
Thomson Reuters is expected to post strong results next month, J.P. Morgan Securities analysts said on Friday, even as they downgraded the London-listed shares to "neutral" from "overweight" on valuation.
The analysts raised their price targets on the London- and New York-listed shares of the group and kept their "neutral" stance on the U.S. stock.
"We continue to like the fundamentals of the company but would look for a better entry price into both stocks," they wrote in a note to clients.
The analysts expect the group to report strong results, with potential cost savings and/or some restructuring charges shifting from 2008 to 2009.
But the key risk to the shares is news about financial industry job losses and the market's potential read-through to organic growth at the group's markets division, they said. The markets division includes the Reuters and Thomson news operations as well as financial data and tools for investment banks and other financial firms.
Chief financial officer Robert Daleo said last week that the group's quarterly and annual revenue growth rate would slow, reflecting the effects of the world financial crisis.
J.P. Morgan analysts, however, said any weakness in the group's markets division revenue will be offset by the relative strength in its professional unit, which represented about 60 per cent of profits. The professional division sells databases and other deep information reservoirs to lawyers, accountants, scientists and the healthcare industry.
Cost savings may also largely cushion any markets revenue decline, the analysts added.
They raised their price target on Thomson Reuters’ London shares to 1,750 pence from 1,500 pence, and on Thomson Reuters Corp shares to $26.60 from $26.30.
● SOURCE Reuters
The analysts raised their price targets on the London- and New York-listed shares of the group and kept their "neutral" stance on the U.S. stock.
"We continue to like the fundamentals of the company but would look for a better entry price into both stocks," they wrote in a note to clients.
The analysts expect the group to report strong results, with potential cost savings and/or some restructuring charges shifting from 2008 to 2009.
But the key risk to the shares is news about financial industry job losses and the market's potential read-through to organic growth at the group's markets division, they said. The markets division includes the Reuters and Thomson news operations as well as financial data and tools for investment banks and other financial firms.
Chief financial officer Robert Daleo said last week that the group's quarterly and annual revenue growth rate would slow, reflecting the effects of the world financial crisis.
J.P. Morgan analysts, however, said any weakness in the group's markets division revenue will be offset by the relative strength in its professional unit, which represented about 60 per cent of profits. The professional division sells databases and other deep information reservoirs to lawyers, accountants, scientists and the healthcare industry.
Cost savings may also largely cushion any markets revenue decline, the analysts added.
They raised their price target on Thomson Reuters’ London shares to 1,750 pence from 1,500 pence, and on Thomson Reuters Corp shares to $26.60 from $26.30.
● SOURCE Reuters
Thomson Reuters shares climb on upgrade
Monday 24 November 2008
Thomson Reuters shares climbed sharply on Monday on all four markets on which they are traded after an analyst upgraded the stock.
The increases occurred as markets staged massive recoveries on positive news: a fiscal stimulus plan in Britain and in the United States a rescue plan for Citigroup and the announcement of President-elect Barack Obama’s economic leadership team.
RBC Capital Markets analyst Drew McReynolds raised his rating on Thomson Reuters to “outperform” from “sector perform”. The upgrade reflected the stock’s recent sharp retreat, in which the company’s shares have lost 40 per cent of their value in the last three months.
The analyst also thinks Thomson Reuters is taking an unfair hit from investors’ poor views of the firm’s Markets Division.
“Although we expect the operating environment for the markets division to remain extremely difficult through 2011 we believe (the stock prices indicate) an overly pessimistic decline scenario for the division,” McReynolds wrote. He trimmed his price target to $30 from $35.
Thomson Reuters’ London shares gained 15.66 per cent to 1,226 pence while those in New York gained 14.59 per cent to $23.33. The Toronto shares gained 10.79 per cent to C$28.75 and on NASDAQ the gain was 15.35 per cent to $111.62.
● SOURCE The Associated Press
The increases occurred as markets staged massive recoveries on positive news: a fiscal stimulus plan in Britain and in the United States a rescue plan for Citigroup and the announcement of President-elect Barack Obama’s economic leadership team.
RBC Capital Markets analyst Drew McReynolds raised his rating on Thomson Reuters to “outperform” from “sector perform”. The upgrade reflected the stock’s recent sharp retreat, in which the company’s shares have lost 40 per cent of their value in the last three months.
The analyst also thinks Thomson Reuters is taking an unfair hit from investors’ poor views of the firm’s Markets Division.
“Although we expect the operating environment for the markets division to remain extremely difficult through 2011 we believe (the stock prices indicate) an overly pessimistic decline scenario for the division,” McReynolds wrote. He trimmed his price target to $30 from $35.
Thomson Reuters’ London shares gained 15.66 per cent to 1,226 pence while those in New York gained 14.59 per cent to $23.33. The Toronto shares gained 10.79 per cent to C$28.75 and on NASDAQ the gain was 15.35 per cent to $111.62.
● SOURCE The Associated Press
Thomson Reuters stock to underperform - analyst
Wednesday 19 November 2008
Thomson Reuters shares are likely to underperform until investors feel that the markets division has bottomed, which may not happen until the first quarter of 2010, UBS analyst Jeffrey Fan told clients on Wednesday.
He maintained his “sell” rating on the stock and $23.50 price target. It closed at $23.77 on the New York Stock Exchange on Tuesday.
Fan said Thomson Reuters is in much better shape to weather retrenchment among investment banks than during 2001-2004 when the sector saw a 10 per cent staff reduction. During that period the markets unit saw an 18 per cent decline in revenues from peak to trough.
This time, Thomson Reuters could take some market share from Bloomberg, given the performance of foreign exchange versus fixed income. But the market environment is arguably worse. An estimated 15 to 20 per cent of the investment banking headcount has already disappeared.
Thomson Reuters’ Q3 results announced on 12 November showed that markets revenues beat consensus estimates, suggesting a modest decline in revenues, Fan said. However, he attributed this strength to transaction revenues driven by volatile foreign exchange and commodity markets, which may not be sustainable. Hence reiteration of his “sell” rating.
Thomson Reuters’ New York-listed shares have fallen more than 40 per cent year-to-date but in Toronto they are down only 27 per cent.
● SOURCE Seeking Alpha
He maintained his “sell” rating on the stock and $23.50 price target. It closed at $23.77 on the New York Stock Exchange on Tuesday.
Fan said Thomson Reuters is in much better shape to weather retrenchment among investment banks than during 2001-2004 when the sector saw a 10 per cent staff reduction. During that period the markets unit saw an 18 per cent decline in revenues from peak to trough.
This time, Thomson Reuters could take some market share from Bloomberg, given the performance of foreign exchange versus fixed income. But the market environment is arguably worse. An estimated 15 to 20 per cent of the investment banking headcount has already disappeared.
Thomson Reuters’ Q3 results announced on 12 November showed that markets revenues beat consensus estimates, suggesting a modest decline in revenues, Fan said. However, he attributed this strength to transaction revenues driven by volatile foreign exchange and commodity markets, which may not be sustainable. Hence reiteration of his “sell” rating.
Thomson Reuters’ New York-listed shares have fallen more than 40 per cent year-to-date but in Toronto they are down only 27 per cent.
● SOURCE Seeking Alpha
Thomson Reuters' UK shares dive, broker reiterates ‘sell’
Monday 06 October 2008
Hugh Van Es, the renowned Dutch photographer who took the "helicopter" photo of the evacuation of Saigon, died on May 15. Hugh was a friend to many of the Reuters journalists who passed through Hong Kong and frequented the FCC over the years. A wake was held for him at the FCC in May. But for those who couldn't make it and would like to honour his memory, former FCC VP and Hon Sec Penny Byrne and her husband Tim Heald are organising a VANES INTERNATIONAL WAKE at the Frontline Club in London, the nearest thing to the FCC in the UK.
Date: Friday 9 October
Time: 1900 hours until last person leaves
Address: 13 Norfolk Place, W2 1QJ (very close to Paddington Station)
Tel: 020 7479 8960
Cash bar, cash food.
Angus MacSwan
Date: Friday 9 October
Time: 1900 hours until last person leaves
Address: 13 Norfolk Place, W2 1QJ (very close to Paddington Station)
Tel: 020 7479 8960
Cash bar, cash food.
Angus MacSwan
Thomson Reuters ‘to use cash’ for acquisitions - report
Saturday 04 October 2008
Bosses of Thomson Reuters apparently have told analysts that they will be using cash primarily to invest in the business and to make acquisitions, The Times said on Saturday.
The professional division, supplying information to lawyers and accountants, was a priority, the newspaper said under the headline “Rumour of the day”.
“This potentially leaves the door open to acquiring Wolters Kluwer,” UBS said, The Times reported.
Wolters Kluwer is a Dutch information services and publishing company based in Amsterdam. It employs 19,500 people worldwide and in 2007 had revenues of €3.4 billion.
● SOURCE The Times
The professional division, supplying information to lawyers and accountants, was a priority, the newspaper said under the headline “Rumour of the day”.
“This potentially leaves the door open to acquiring Wolters Kluwer,” UBS said, The Times reported.
Wolters Kluwer is a Dutch information services and publishing company based in Amsterdam. It employs 19,500 people worldwide and in 2007 had revenues of €3.4 billion.
● SOURCE The Times
Canadian broker downgrades Thomson Reuters
Monday 22 September 2008
Thomson Reuters has been downgraded and its price target cut as a result of the negative implications last week’s market turmoil on the financial sector and the broader economy.
“The possibility of further financial services consolidation combined with increased discipline and restraint as the global financial system recapitalizes are likely to reduce the size and near-term growth outlook for many of Thomson Reuters’ end-markets,” RBC Capital Markets analyst Drew McReynolds said in a research note.
He also noted that volatility in emerging markets suggests a slower pace for the company’s geographic expansion efforts.
McReynolds cut his price target from US$39 per share to US$37 and moved his rating to “sector perform” given Thomson Reuters’ 18 per cent two-day run-up.
He does not expect a major catalyst for the stock – more clarity on the pending downturn in its markets division – until the first half of 2009.
● SOURCE National Post
“The possibility of further financial services consolidation combined with increased discipline and restraint as the global financial system recapitalizes are likely to reduce the size and near-term growth outlook for many of Thomson Reuters’ end-markets,” RBC Capital Markets analyst Drew McReynolds said in a research note.
He also noted that volatility in emerging markets suggests a slower pace for the company’s geographic expansion efforts.
McReynolds cut his price target from US$39 per share to US$37 and moved his rating to “sector perform” given Thomson Reuters’ 18 per cent two-day run-up.
He does not expect a major catalyst for the stock – more clarity on the pending downturn in its markets division – until the first half of 2009.
● SOURCE National Post
Deutsche Bank downgrades Thomson Reuters shares
Friday 19 September 2008
Deutsche Bank downgraded Thomson Reuters to “sell” from “buy” and cut its price target on the stock to 1,000 pence from 2,400 pence on Friday.
It said it sees revenue shortfall in the company’s markets division from the turmoil in the financial markets.
Fifty per cent of the division’s revenue are headcount driven and this will now decline faster than previously expected, analyst Mark Braley wrote in a note to clients.
“The direct hit to TR Market’s headcount-driven business will be severe,” Braley said. He now expects the investment banking industry to lose 25 per cent of jobs in 2008-2010, up from his previous forecast of 15 per cent.
The job losses will be as severe as those seen in the 1969-1975 downturn and far worse than 1987-1991 or 2001-2003, he believes.
Bank failures and mergers will cut demand for Thomson Reuters’ systems and software while a sustained period of market paralysis will see a drop in usage volumes. Pricing will be inevitably weaker.
Thomson Reuters shares traded on the London Stock Exchange at 1,360 pence, up 7.09 per cent, at 0920 GMT.
● SOURCE Reuters
It said it sees revenue shortfall in the company’s markets division from the turmoil in the financial markets.
Fifty per cent of the division’s revenue are headcount driven and this will now decline faster than previously expected, analyst Mark Braley wrote in a note to clients.
“The direct hit to TR Market’s headcount-driven business will be severe,” Braley said. He now expects the investment banking industry to lose 25 per cent of jobs in 2008-2010, up from his previous forecast of 15 per cent.
The job losses will be as severe as those seen in the 1969-1975 downturn and far worse than 1987-1991 or 2001-2003, he believes.
Bank failures and mergers will cut demand for Thomson Reuters’ systems and software while a sustained period of market paralysis will see a drop in usage volumes. Pricing will be inevitably weaker.
Thomson Reuters shares traded on the London Stock Exchange at 1,360 pence, up 7.09 per cent, at 0920 GMT.
● SOURCE Reuters
Markets division revenue ‘to take a hit’
Friday 19 September 2008
Thomson Reuters markets division revenue will likely take a hit from the current financial markets turmoil, at least two analysts said on Friday.
“Given that more financial institutions may still be at risk it seems likely... that Markets revenues will turn negative next year,” analyst Gareth Thomas of Collins Stewart wrote in a note to clients.
Mark Braley of Deutsche Bank noted that 50 per cent of the markets’ revenue are headcount driven and this will now decline faster than previously expected.
He downgraded the stock to “sell” from “buy” and cut his price target to 1,000 pence from 2,400 pence.
“The direct hit to TR Market’s headcount-driven business will be severe,” Braley said.
The markets division includes the news operations as well as financial data and tools for investment banks and other financial firms.
Thomson Reuters shares traded on the London Stock Exchange were 10.63 per cent higher at 1,405 pence at 1230 GMT on Friday.
● SOURCE Reuters
“Given that more financial institutions may still be at risk it seems likely... that Markets revenues will turn negative next year,” analyst Gareth Thomas of Collins Stewart wrote in a note to clients.
Mark Braley of Deutsche Bank noted that 50 per cent of the markets’ revenue are headcount driven and this will now decline faster than previously expected.
He downgraded the stock to “sell” from “buy” and cut his price target to 1,000 pence from 2,400 pence.
“The direct hit to TR Market’s headcount-driven business will be severe,” Braley said.
The markets division includes the news operations as well as financial data and tools for investment banks and other financial firms.
Thomson Reuters shares traded on the London Stock Exchange were 10.63 per cent higher at 1,405 pence at 1230 GMT on Friday.
● SOURCE Reuters
Thomson Reuters shares take beating
Monday 15 September 2008
Thomson Reuters took a beating in London, New York and Toronto on Monday in immediate negative fallout from the US credit crisis.
On the London Stock Exchange, the shares closed at 1,400 pence, a drop on the day of 7.84 per cent.
The losses were worse in North America where there were falls of more than 10 per cent.
In New York, the stock lost 10.93 per cent of its value to close at $29.41 on the New York Stock Exchange and 10.43 per cent to $146.73 on NASDAQ.
On the Toronto Stock Exchange, Thomson Reuters tumbled to C$31.25, down 10.59 per cent.
Canada’s National Post said that with bankrupt Lehman Brothers accounting for an estimated 1 per cent of Thomson Reuters’ revenues, assuming most of this is lost, it means a 3 per cent downgrade to the company’s 2009 earnings per share (EPS).
Merrill Lynch, which agreed to sell itself to Bank of America for about $50 billion, likely has a similar amount to Lehman, UBS Securities said in a report.
“Given the lag factor between job cuts and cancellations, we believe the brunt of the investment banking downturn is likely to be felt from Q4 2008 onwards and ongoing investment banking consolidation will weigh on sentiment,” UBS analyst Jeffrey Fan told clients.
During the 2002-2004 downturn, Thomson’s Markets business lost 18 per cent of its revenues from peak to trough, he said. While things are different this time, Fan sees substantial downside risks to conservative assumptions of flat Markets growth in 2009 and 2010.
The analyst said that with Thomson Reuters already trading at a premium of 17 times 2009 estimated EPS, the additional downside risk to earnings makes the risk reward “unattractive”. He continues to rate the shares a “sell” with a $28 price target.
Don Vialoux, a Canadian chartered market technician, said Thomson Reuters currently has a negative technical profile. Intermediate trend is down. The stock trades below its 200-day moving average and on Monday morning broke below support at C$33.75 and its 50-day moving average. Support exists at C$27.51, he added.
● SOURCE National Post
On the London Stock Exchange, the shares closed at 1,400 pence, a drop on the day of 7.84 per cent.
The losses were worse in North America where there were falls of more than 10 per cent.
In New York, the stock lost 10.93 per cent of its value to close at $29.41 on the New York Stock Exchange and 10.43 per cent to $146.73 on NASDAQ.
On the Toronto Stock Exchange, Thomson Reuters tumbled to C$31.25, down 10.59 per cent.
Canada’s National Post said that with bankrupt Lehman Brothers accounting for an estimated 1 per cent of Thomson Reuters’ revenues, assuming most of this is lost, it means a 3 per cent downgrade to the company’s 2009 earnings per share (EPS).
Merrill Lynch, which agreed to sell itself to Bank of America for about $50 billion, likely has a similar amount to Lehman, UBS Securities said in a report.
“Given the lag factor between job cuts and cancellations, we believe the brunt of the investment banking downturn is likely to be felt from Q4 2008 onwards and ongoing investment banking consolidation will weigh on sentiment,” UBS analyst Jeffrey Fan told clients.
During the 2002-2004 downturn, Thomson’s Markets business lost 18 per cent of its revenues from peak to trough, he said. While things are different this time, Fan sees substantial downside risks to conservative assumptions of flat Markets growth in 2009 and 2010.
The analyst said that with Thomson Reuters already trading at a premium of 17 times 2009 estimated EPS, the additional downside risk to earnings makes the risk reward “unattractive”. He continues to rate the shares a “sell” with a $28 price target.
Don Vialoux, a Canadian chartered market technician, said Thomson Reuters currently has a negative technical profile. Intermediate trend is down. The stock trades below its 200-day moving average and on Monday morning broke below support at C$33.75 and its 50-day moving average. Support exists at C$27.51, he added.
● SOURCE National Post
London shares still lag North America
Wednesday 20 August 2008
Four months and counting since the merger, and Thomson Reuters shares in London still lag those in North America, Financial Post said on Wednesday.
The price gap has been consistent – about 15 to 20 per cent once foreign exchange rates are factored in – and no one is quite sure why, it said.
In a note to clients yesterday, USB analyst Jeffrey Fan reiterated his previous view that the spread is likely to remain into next year.
He believes that differing views of Canadian and European investors on the prospects for the London shares is part of the reason for the gap.
North Americans are more likely to focus on strengths in the Thomson Reuters division that sells specialised legal and scientific data, while Europeans look to risks in the company's business that sells data and equipment to the troubled financial services industry, he said.
At the Thomson Reuters annual meeting in May, chief financial officer Robert Daleo would not speculate about the London discount, Financial Post said.
He only alluded to a significant short position in the North American shares that would take some time to unwind. Short sellers borrow and then sell shares in a company. They want the stock to drop in price so when it is time to return the shares they can buy them back at a cheaper price and pocket the difference.
Fan said the short position in the London shares remains high, at 13.5 per cent, but lower than the 20 per cent figure of last month.
“Observers say it is anyone's guess as to when the gap will narrow. One analyst yesterday compared the situation to a war of attrition,” Financial Post said.
Fan noted that Thomson Reuters vice-chairman Geoffrey Beattie recently sold 40,000 of the North American shares and bought the equivalent of 66,600 shares in London.
The analyst maintains his "sell" rating as he believes a gloomy outlook for global financial services adds risk to the consensus earnings estimates.
● SOURCE Financial Post
The price gap has been consistent – about 15 to 20 per cent once foreign exchange rates are factored in – and no one is quite sure why, it said.
In a note to clients yesterday, USB analyst Jeffrey Fan reiterated his previous view that the spread is likely to remain into next year.
He believes that differing views of Canadian and European investors on the prospects for the London shares is part of the reason for the gap.
North Americans are more likely to focus on strengths in the Thomson Reuters division that sells specialised legal and scientific data, while Europeans look to risks in the company's business that sells data and equipment to the troubled financial services industry, he said.
At the Thomson Reuters annual meeting in May, chief financial officer Robert Daleo would not speculate about the London discount, Financial Post said.
He only alluded to a significant short position in the North American shares that would take some time to unwind. Short sellers borrow and then sell shares in a company. They want the stock to drop in price so when it is time to return the shares they can buy them back at a cheaper price and pocket the difference.
Fan said the short position in the London shares remains high, at 13.5 per cent, but lower than the 20 per cent figure of last month.
“Observers say it is anyone's guess as to when the gap will narrow. One analyst yesterday compared the situation to a war of attrition,” Financial Post said.
Fan noted that Thomson Reuters vice-chairman Geoffrey Beattie recently sold 40,000 of the North American shares and bought the equivalent of 66,600 shares in London.
The analyst maintains his "sell" rating as he believes a gloomy outlook for global financial services adds risk to the consensus earnings estimates.
● SOURCE Financial Post
Q2 results: focus on two-year outlook
Wednesday 06 August 2008
Thomson Reuters looks poised to deliver second quarter results on Tuesday just above expectations, but investors should focus on the outlook over the next two years, UBS analyst Jeffrey Fan says.
Reuters’ revenue fell 17 per cent during the bear market in 2002, and while Fan believes the company will fare better this time around, he sees considerable downside risk to consensus estimates of flat revenue growth over the next two years, Financial Post of Toronto reported in a blog posting under the headline ‘Thomson Reuters vulnerable to economic slowdown’.
The company’s markets business is susceptible to downturns in the financial services sector because it depends on banks and insurance firms to buy the data and equipment it produces.
“If consensus estimates hold, then [Thomson Reuters] still trades on a premium to its peers,” Fan wrote in a note to clients on Wednesday.
The analyst’s worst case scenario is a 50 per cent drop in earnings per share next year if the company suffers on the same level it did in the last downturn. He has a “sell” rating on the stock.
Financial Post said that of the analysts Bloomberg lists covering Thomson Reuters stock, nine have “buy” recommendations, five have “hold” and four “sell”.
● SOURCE Financial Post
Reuters’ revenue fell 17 per cent during the bear market in 2002, and while Fan believes the company will fare better this time around, he sees considerable downside risk to consensus estimates of flat revenue growth over the next two years, Financial Post of Toronto reported in a blog posting under the headline ‘Thomson Reuters vulnerable to economic slowdown’.
The company’s markets business is susceptible to downturns in the financial services sector because it depends on banks and insurance firms to buy the data and equipment it produces.
“If consensus estimates hold, then [Thomson Reuters] still trades on a premium to its peers,” Fan wrote in a note to clients on Wednesday.
The analyst’s worst case scenario is a 50 per cent drop in earnings per share next year if the company suffers on the same level it did in the last downturn. He has a “sell” rating on the stock.
Financial Post said that of the analysts Bloomberg lists covering Thomson Reuters stock, nine have “buy” recommendations, five have “hold” and four “sell”.
● SOURCE Financial Post
Broker rates Thomson Reuters ‘hold’
Friday 18 July 2008
Broker JP Morgan lowered its target price on Thomson Reuters to 1,900 pence from 2,000 pence but kept its “overweight” rating on the company’s shares.
It thinks the market is too pessimistic on the outlook for revenues for the markets division, which includes news services. It added that the more defensive professional business will also help Thomson Reuters deliver growth.
On the London Stock Exchange the share was one of the FTSE 100’s biggest gainers, closing 60 pence higher at 1,380 pence, a rise of 4.55 per cent on the day.
● SOURCE ShareCast
It thinks the market is too pessimistic on the outlook for revenues for the markets division, which includes news services. It added that the more defensive professional business will also help Thomson Reuters deliver growth.
On the London Stock Exchange the share was one of the FTSE 100’s biggest gainers, closing 60 pence higher at 1,380 pence, a rise of 4.55 per cent on the day.
● SOURCE ShareCast
UBS says sell Thomson Reuters shares
Monday 14 July 2008
Investment bank UBS lowered its rating on Thomson Reuters to “sell” from “neutral”, saying revenue in the market for financial information will deteriorate from the fourth quarter of 2008 as investment banking job cuts lead to subscriber cancellations.
In the worst case there is a 50 per cent downside risk to the company’s per share earnings, UBS analyst Jeffrey Fan wrote in a note to clients.
He now expects an 8.5 per cent fall in financial markets revenue from 2009 to 2011, revising a previous estimate of a 5 per cent decline.
“Along with adjustments to Markets cost base and additional restructuring charges, our 2011 earnings per share estimate is downgraded 19 per cent putting us 20-25 per cent below consensus.”
The analyst added that while Thomson Reuters Q2 results (due on 12 August) are expected to be solid, the outlook, which bears significant downside risk, is the key for investors.
Reiterating his “sell” rating, he cut his price target for the Canadian shares to C$28 from C$33.
UBS also cut its target price on the UK shares to 1,260 pence from 1,650 pence.
On the London Stock Exchange, TRIL was the biggest faller in the FTSE 100, closing at 1,245 pence, down 40 pence or 3.11 per cent. On the first day of the merged company, 17 April, Thomson Reuters shares opened at 1,700 pence and closed at 1,560 pence.
● SOURCE ShareCast | Bloomberg | Financial Post
In the worst case there is a 50 per cent downside risk to the company’s per share earnings, UBS analyst Jeffrey Fan wrote in a note to clients.
He now expects an 8.5 per cent fall in financial markets revenue from 2009 to 2011, revising a previous estimate of a 5 per cent decline.
“Along with adjustments to Markets cost base and additional restructuring charges, our 2011 earnings per share estimate is downgraded 19 per cent putting us 20-25 per cent below consensus.”
The analyst added that while Thomson Reuters Q2 results (due on 12 August) are expected to be solid, the outlook, which bears significant downside risk, is the key for investors.
Reiterating his “sell” rating, he cut his price target for the Canadian shares to C$28 from C$33.
UBS also cut its target price on the UK shares to 1,260 pence from 1,650 pence.
On the London Stock Exchange, TRIL was the biggest faller in the FTSE 100, closing at 1,245 pence, down 40 pence or 3.11 per cent. On the first day of the merged company, 17 April, Thomson Reuters shares opened at 1,700 pence and closed at 1,560 pence.
● SOURCE ShareCast | Bloomberg | Financial Post
Share price falls after ‘savage’ note
Thursday 19 June 2008
Thomson Reuters shares fell to the lowest level since the merger two months ago after a broker advised investors to “sell now while there’s a buyer in town” before the company finishes its buy-back programme.
Market watchers said the stock has been surprisingly resilient since falling 9 per cent on its first day of trading on 17 April.
But it fell 4.75 per cent to £14.45 after Collins Stewart analyst Gareth Thomas said the share price has been held up by the company’s buy-back programme, now 80 per cent complete.
A blog posting on The Guardian website said it was a “savage” sell note.
The broker said: “Since its disastrous first day of post-merger trading when it fell 9%, Thomson Reuters has performed relatively well, outperforming the FT All Share by 1.2%. Why is this? We don’t believe the company is less cyclical than the market, nor particularly cheap. But what may explain its resilience is a $500m buyback programme. But this is now 80% complete. There remains a risk that once it is finished, Thomson Reuters’ shares will fall to reflect its inherent cyclical risk.”
Collins Stewart reckons that the buyback has accounted for nearly 15 per cent of the daily volume in Thomson Reuters shares since the merger. At that rate it estimates the programme will be complete in 12 trading days.
“Given that there is a willing buyer in the market, Thomson Reuters itself, we recommend catching ‘em well (sic) you can, they’ll be gone in 12 trading days. Don’t wait to see if the buyback is holding the shares up; sell now.”
● SOURCE The Guardian | Daily Telegraph
Market watchers said the stock has been surprisingly resilient since falling 9 per cent on its first day of trading on 17 April.
But it fell 4.75 per cent to £14.45 after Collins Stewart analyst Gareth Thomas said the share price has been held up by the company’s buy-back programme, now 80 per cent complete.
A blog posting on The Guardian website said it was a “savage” sell note.
The broker said: “Since its disastrous first day of post-merger trading when it fell 9%, Thomson Reuters has performed relatively well, outperforming the FT All Share by 1.2%. Why is this? We don’t believe the company is less cyclical than the market, nor particularly cheap. But what may explain its resilience is a $500m buyback programme. But this is now 80% complete. There remains a risk that once it is finished, Thomson Reuters’ shares will fall to reflect its inherent cyclical risk.”
Collins Stewart reckons that the buyback has accounted for nearly 15 per cent of the daily volume in Thomson Reuters shares since the merger. At that rate it estimates the programme will be complete in 12 trading days.
“Given that there is a willing buyer in the market, Thomson Reuters itself, we recommend catching ‘em well (sic) you can, they’ll be gone in 12 trading days. Don’t wait to see if the buyback is holding the shares up; sell now.”
● SOURCE The Guardian | Daily Telegraph
