National Bank of Canada today reduced its 12-month target price on Thmson Reuters to C$175 from C$190. National Bank continues to expect solid revenue growth and margin expansion through 2028, however the target cut reflects a shift toward more conservative valuation assumptions, particularly in light of risks associated with artificial intelligence’s competitive impact on Thomson Reuters’ core markets.
National Bank’s revised outlook acknowledges that Thomson Reuters is well positioned within legal, tax, accounting, and corporate information services, and that underlying demand for high-value content and workflow solutions is expected to remain strong. The firm still anticipates expanding operating margins as the company scales its software and subscription offerings, benefiting from recurring revenue streams and improved pricing power.
However, the valuation reset stems from heightened uncertainty around how AI tools will reshape competitive dynamics in the information and analytics space. As AI capabilities become more pervasive, National Bank is factoring in the possibility that legacy decision support and workflow products may face increased substitution risk or pricing pressure from newer AI-enabled competitors. This scenario could moderate future multiple expansion or lead to greater variability in investor sentiment.
By adopting more cautious valuation assumptions, National Bank’s revised target reflects both confidence in Thomson Reuters’ execution and growth trajectory, as well as a prudent adjustment for industry disruption risk over the mid-term investment horizon.
