Q: How can TRI investors justify a P/e of 42X and a P/b of 5.48X
on 7% to 9% growth projection?
on 7% to 9% growth projection?
5i Research Answer:
We show a forward P/E of 33X which is not cheap but is not unheard of for large, stable companies that have a reliable runway for consistent growth. In fairness, these types of companies have been out of favour for the last few months and they need to execute to justify their valuations but they also trade at the premium valuations because they actually do deliver year in and year out. It is a bit apples and oranges, but just as an illustration, COST trades at 45X forward earnings with similar growth and low single digit margins vs TRI margins in the mid-20% range.