Is Thomson Reuters Corporation Common Shares (TRI) overvalued?
On Equity Rank's model estimate, TRI trades close to its fair value (5% above it). Thomson Reuters Corporation Common Shares (TRI) last closed at $112.57; the multi-method model fair value is $106.87.
| Price | Model fair value | Price vs model |
|---|---|---|
| $112.57 | $106.87 | 5% above |
What the answer rests on
- 3 of 9 valuation methods put TRI's value above its price and 6 put it below, so the methods disagree.
- To justify today's price, TRI's free cash flow would need to grow about 1.9% a year for ten years (a reverse discounted cash flow). Over the last three years it actually grew 15.8% a year.
- TRI trades at 36.0 times its last year's earnings, against a median of 24.8 for 187 profitable Industrials companies.
- Over the past year the price sat below the model fair value on 1% of trading days. The gap ranged from 1% below to 72% above the model fair value.
Read this before relying on it
The model fair value is an estimate from published financial statements. It is not a forecast of where the price goes, and it can be wrong. Within 10% either side we call it close to fair value: valuation models are not precise enough to read more into a smaller gap. Our own lists have no proven edge over the market yet; the live record shows every result, misses included.
Every valuation method behind TRI's fair value · What prices assume · Other companies