Thomson Reuters Drops 5.4% While Carrying a B Quality Grade

• Our read: EasyAlpha grades TRI B, scoring better than most Industrials peers among the top 1,000 U.S. companies, led by its debt load while momentum is the main area to watch.
• The day: The stock fell 5.4% to close at $105.68 on Friday, September 4 as broader market selling and headline scrutiny weighed on trading.
• Watching: How the shares perform after pulling back 37.6% from their 52-week high of $169.32.

On Friday, September 4, Thomson Reuters Corporation Common Shares (TRI) fell 5.4% to close at $105.68. The move was notable for the stock, exceeding the size of most daily swings over the past year. Broad market sentiment softened after stronger-than-expected U.S. employment data increased expectations that the Federal Reserve would keep interest rates elevated. Pressure also followed reports that the company detected a cybersecurity incident involving unauthorized access to files. Trading volume came in at 0.8x of the 20-session average.

EasyAlpha grades TRI B, ranking it in the good quality tier against other Industrials companies among the top 1,000 U.S. companies. In historical testing across our coverage, companies graded A or B have shown stronger fundamentals and lower risk of steep drawdowns than lower-graded peers. Thomson Reuters generated quarterly revenue growth of +9.5% year over year, with a profit margin of 21.2%. Its strongest scored area is its debt load.

The stock is -19.9% so far this year, leaving the price 37.6% below its 52-week high of $169.32. EasyAlpha identifies momentum as the main item to monitor, reflecting this extended share price weakness. At current levels, the stock trades at 27.9 times trailing earnings. Wall Street analysts remain broadly constructive, with 72.2% of analysts rating the stock a buy and setting an average price target of $122.29, which sits 15.7% above Friday's close.