T. Rowe Price: Not So Attractive Anymore

Nov. 18, 2022 3:00 PM ETT. Rowe Price Group, Inc. (TROW)12 Comments

Summary

  • Asset manager T. Rowe Price Group, Inc. underperformed in its recent Q3 card, but the market has likely anticipated a weak earnings release.
  • As such, T. Rowe Price Group still managed to bottom in October (pre-earnings) and even surge to its August highs recently, outperforming the S&P 500 significantly.
  • We discuss why analysts' projections likely reflect significant pessimism in the asset management industry.
  • However, T. Rowe needs to execute well to justify a further re-rating as its relative valuation to its peers' median has widened.
  • Revising from Buy to Hold for now, as we believe T. Rowe Price Group's near-term upside has been reflected.
  • I do much more than just articles at Ultimate Growth Investing: Members get access to model portfolios, regular updates, a chat room, and more. Learn More »

T. Rowe Price

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Thesis

Asset manager T. Rowe Price Group, Inc. (NASDAQ:TROW) saw its stock price surge recently with the release of its recent assets under management ("AUM") metrics. Accordingly, T. Rowe posted an October AUM of $1.28T, above its Q3 ending AUM

T. Rowe Ending AUM

T. Rowe Ending AUM (Company filings)

T. Rowe Revenue change % and Adjusted EPS change % consensus estimates

T. Rowe Revenue change % and Adjusted EPS change % consensus estimates (S&P Cap IQ)

S&P 500 Asset management industry net earnings revisions %

S&P 500 Asset management industry net earnings revisions % (Yardeni Research, Refinitiv)

TROW NTM normalized P/E valuation trend

TROW NTM normalized P/E valuation trend (koyfin)

TROW price chart (weekly)

TROW price chart (weekly) (TradingView)

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Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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