Could AI actually help Thomson Reuters?

Kingwest & Company managing director Tim Regan says Thomson Reuters (Thomson Reuters Stock Quote, Chart, News, Analysts, Financials TSX:TRI) could benefit from the growing adoption of artificial intelligence, arguing that its extensive collection of professional information gives it an advantage as AI becomes more widely used.

Speaking on BNN Bloomberg’s Market Call on Oct. 23, Regan said his firm began buying Thomson Reuters shares in April at approximately $125.00, following a decline driven partly by concerns about AI’s potential impact on the business.

“This is looking at AI, and we see AI being sold on top of the content that professionals can’t work without, and growth should get faster, not slower,” Regan said.

Thomson Reuters provides information, research and software to legal, tax, accounting and other professionals. Regan believes the company’s proprietary content will become increasingly valuable as AI tools are integrated into professional workflows.

“Is AI going to replace everything, or is AI actually going to help some of these businesses?” he said. “And providing the content, that’s what AI needs to do its job. So that’s very powerful, and that’s what they have.”

Regan also pointed to Thomson Reuters’ established market position, long-term shareholders and management team as reasons for his confidence. He said the company’s decision to sell a 51% interest in its global print business to private equity firm KKR is an example of steps management has taken to improve its operations.

Regan said Thomson Reuters shares had previously traded near $280.00, suggesting there is room for a recovery if the company delivers stronger growth.

“We think Thomson is actually a growing business, and we bought it when we thought it was superbly cheap,” he said. He estimates the shares could be worth approximately $240.00 to $250.00 within three years.

The stock has declined 24.9% over the past 12 months but remains up 15.1% over five years.

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