Thomson Reuters Earnings: Organic Revenue Growth Steady; Margins Impress

Narrow moat-rated Thomson Reuters reported a slight revenue miss but strong profits partly due to expense timing. Revenues missed the FactSet consensus estimate by 1% but adjusted EBITDA of $632 million beat the consensus estimate of $585 million. Management maintained its 2023 margin outlook of 39% and attributed the expense beat to timing, but we believe this may prove conservative for the full year. As we tweak our model, we are modestly increasing our fair value estimate on Thomson Reuters' shares to $112 from $109 primarily due to time value of money. While Thomson Reuters' businesses have many positive attributes, we regard shares as a touch pricey at current levels.