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T. Rowe Price Group, Inc. (TROW), founded in 1937 and headquartered in Baltimore, Maryland, is a leading global asset management firm. With a market cap of $25.3 billion, T. Rowe Price offers a wide range of investment solutions, including mutual funds, advisory services, and retirement planning, to millions of clients worldwide. The company is set to announce its fourth-quarter earnings before the market opens on Wednesday, Feb. 5.
Ahead of the event, analysts expect TROW to report a profit of $2.25 per share on a diluted basis, up 30.8% from $1.72 per share in the year-ago quarter. The company has consistently surpassed Wall Street’s EPS estimates in its last four quarterly reports.
Its adjusted earnings of $2.57 per share in the last quarter outpaced the consensus estimates by 8.9%. Higher advisory fees and asset growth drove T. Rowe Price's earnings beat.
For the full year, analysts expect TROW to report EPS of $9.45, up 24.5% from $7.59 in fiscal 2023. Its EPS is expected to rise marginally year over year to $9.53 in fiscal 2025.
T. Rowe Price's shares have climbed 2.6% over the past 52 weeks, significantly underperforming the S&P 500 Index's ($SPX) 25.5% gains and the Financial Select Sector SPDR Fund’s (XLF) 32.3% gains over the same period.
T. Rowe Price has faced challenges in keeping pace with the broader market and its peers, primarily due to declining net inflows, rising operating expenses, and heightened competition within the asset management industry.
However, following the release of its Q3 earnings on Nov. 1, the company’s shares gained 2%. T. Rowe Price's revenue of $1.79 billion fell short of analysts' expectations of $1.84 billion but represented a 6.9% year-over-year increase. The firm's assets under management (AUM) grew by $61.8 billion during the quarter, reaching $1.63 trillion. Meanwhile, adjusted operating expenses rose 3.6% year-over-year to $1.1 billion, reflecting continued cost pressures.
Analysts’ consensus opinion on TROW stock is moderately bearish, with a “Moderate Sell” rating overall. Out of 14 analysts covering the stock, eight give a “Hold” rating, one advises a “Moderate Sell” rating, and five recommend a “Strong Sell.” While TROW currently trades above its mean price target of $112.64, the Street-high price target of $132 suggests an upside potential of 16.3%.
