As of May 22, 2025, Thomson Reuters Corp's estimated intrinsic value ranges from $146.39 to $584.69 per share, depending on the valuation methodology applied.
| Valuation Method | Fair Value (USD) | Implied Upside/Downside |
|---|---|---|
| Discounted Cash Flow (10Y) | $196.89 | -27.8% |
| Discounted Cash Flow (5Y) | $181.78 | -33.4% |
| Dividend Discount Model (Multi-Stage) | $146.39 | -46.3% |
| Dividend Discount Model (Stable) | $584.69 | +114.4% |
| Earnings Power Value | $169.29 | -37.9% |
Is Thomson Reuters Corp (TRI.TO) undervalued or overvalued?
With the current market price at $272.77, the stock appears to be moderately overvalued.
Intrinsic value represents the "true" worth of a company based on its fundamentals rather than market sentiment. We've employed multiple methodologies to triangulate Thomson Reuters Corp's intrinsic value, including:
The cost of capital is a critical factor in valuation models, representing the required return for investors.
| WACC Component | Low | High |
|---|---|---|
| Long-term bond rate | 3.2% | 3.7% |
| Equity market risk premium | 5.1% | 6.1% |
| Adjusted beta | 0.47 | 0.77 |
| Cost of equity | 5.6% | 8.9% |
| Cost of debt | 4.0% | 4.5% |
| Tax rate | 9.9% | 15.9% |
| Debt/Equity ratio | 0.03 | 0.03 |
| After-tax WACC | 5.5% | 8.7% |
Our DCF model projects cash flows over 5-year and 10-year horizons, with the following key assumptions:
| DCF Model | Fair Value | Enterprise Value | % from Terminal Value |
|---|---|---|---|
| 5-Year Growth | $130 | $60,315M | 86.9% |
| 10-Year Growth | $141 | $65,186M | 75.4% |
| 5-Year EBITDA | $105 | $48,805M | 83.8% |
| 10-Year EBITDA | $118 | $54,935M | 70.8% |
The DDM values a company based on its expected future dividend payments. We used two approaches:
EPV assesses a company's value based on its current normalized earnings power, assuming no growth.
| EPV Component | Value |
|---|---|
| Normalized Earnings | $3,789M |
| Discount Rate (WACC) | 8.7% - 5.5% |
| Enterprise Value | $43,588M - $68,987M |
| Net Debt | $1,690M |
| Equity Value | $41,898M - $67,297M |
| Outstanding Shares | 450M |
| Fair Value | $93 - $149 |
| Selected Fair Value | $169.29 |
| Metric | Value |
|---|---|
| Market Capitalization | $122867M |
| Enterprise Value | $125227M |
| Trailing P/E | 40.67 |
| Forward P/E | 49.12 |
| Trailing EV/EBITDA | 17.85 |
| Current Dividend Yield | 112.53% |
| Dividend Growth Rate (5Y) | 6.71% |
| Debt-to-Equity Ratio | 0.03 |
To determine the most reliable intrinsic value estimate, we weigh each valuation method based on:
| Valuation Method | Weight | Weighted Value |
|---|---|---|
| Discounted Cash Flow (10Y) | 30% | $59.07 |
| Discounted Cash Flow (5Y) | 25% | $45.44 |
| Dividend Discount Model (Multi-Stage) | 20% | $29.28 |
| Dividend Discount Model (Stable) | 15% | $87.70 |
| Earnings Power Value | 10% | $16.93 |
| Weighted Average | 100% | $238.42 |
Based on our comprehensive valuation analysis, Thomson Reuters Corp's weighted average intrinsic value is $238.42, which is approximately 12.6% below the current market price of $272.77.
Key investment considerations:
Given these factors, we believe Thomson Reuters Corp is currently moderately overvalued with the potential for long-term appreciation based on the company's growth trajectory and financial strength.