Thomson Reuters: Murky Future, But Still a Defensive Media Play

The outlook for the financial services sector next year remains murky enough for USB analyst Jeffrey Fan to write that there is still significant downside risk to 2009 consensus estimates for Thomson Reuters Corp. (TRI)

“Since Q2 was just the start of a slowing organic revenue growth cycle, we believe it is too early to look across the valley,” he wrote in a note to clients yesterday.

He also notes that the company’s non-fungible shares in London continue to trade at a 17% discount to their counterparts in North America. He rates the stock a "sell", with a $28 target price.

RBC Capital Markets analyst Drew McReynolds lowers his target price on Thomson Reuters from $45 to $44, to reflect his debt assumptions following completion of the Reuters acquisition.

Mr. McReynolds believes the stock will trade range bound until more is known about the financial services “bottom.” He rates the stock an "outperform", because it is still one of the best defensive names in the media universe and he believes it is trading at a good entry point.

All prices in US dollars