Baltimore, Maryland-based T. Rowe Price Group, Inc. (TROW), founded in 1937, serves as a global investment manager for individuals, institutions, and retirement plans. The company specializes in both equity and fixed-income mutual funds, utilizing a combination of fundamental and quantitative analysis with a bottom-up approach.
Socially responsible investing is at the forefront of T. Rowe Price’s mission, emphasizing environmental, social, and governance issues. With its long history in venture capital and a broad international reach, the firm continues to adapt to market changes while striving to deliver strong, sustainable returns.
Current Market Performance
With a market cap of $26.6 billion, T. Rowe Price shares have increased by 22.6% over the past year and are up 11.3% year-to-date (YTD). However, this performance lags behind the broader S&P 500 Index’s ($SPX) 31% gain during the same period and its 25.2% return in 2024.
Focusing more closely, TROW stock also trails the iShares U.S. Financial Services ETF (IYG), which has risen by about 49.1% over the last year and 36.4% YTD.
Challenges and Strengths
Despite holding steady in 2024, with a solid dividend and positive returns, T. Rowe Price finds itself trailing peers and the S&P 500. The firm has faced challenges, including 13 consecutive quarters of net outflows due to the growing popularity of low-cost ETFs. Nevertheless, T. Rowe Price maintains a resilient business model, marked by no long-term debt on its balance sheet and a pivot towards popular investment products. Its impressive 38-year dividend streak and a yield of 4.14% continue to attract investors, offering a degree of stability amid shifting market conditions.
For the current fiscal year ending in December, analysts project T. Rowe Price’s earnings per share (EPS) will increase by 22.9% year over year to $9.33. The company has demonstrated a solid record of surpassing earnings estimates, achieving this feat in each of the last four quarters.
Analyst Ratings and Price Outlook
Among the 14 analysts monitoring TROW stock, the consensus rating is a “Moderate Sell.” This outlook includes eight “Hold” ratings, one “Moderate Sell,” and five “Strong Sells,” indicating some skepticism about future performance.
This trend of analyst ratings has been consistent over recent months.
On November 11, Deutsche Bank (DB) updated its outlook on TROW, raising its price target to $120 while holding a “Hold” rating. This change reflects expectations of improved capital market activity following the U.S. elections. However, rising inflation risks, such as those from tariffs, might limit interest rate reductions and lead to slightly higher long-term bond yields. This nuanced economic landscape informs the bank’s cautious position on the stock.
Currently, T. Rowe Price trades at a premium compared to the average price target of $112.07. Notably, the highest target price of $129, set by Morgan Stanley (MS) analyst Michael Cyprys earlier this month, suggests a potential rally of up to 7.6%.
On the date of publication, Sristi Jayaswal did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information, please view the Barchart Disclosure Policy here.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
