T. Rowe Price Group, Inc. TROW is scheduled to report fourth-quarter 2024 results on Feb. 5, before the opening bell. The company’s quarterly revenues and earnings are expected to have witnessed improvements from the year-ago reported levels.
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In the last reported quarter, TROW’s earnings surpassed the Zacks Consensus Estimate. A rise in its assets under management (AUM) supported net revenues.
T. Rowe Price’s earnings outpaced the Zacks Consensus Estimate in the trailing four quarters, the average surprise being 8.81%.
T. Rowe Price Group, Inc. Price and EPS Surprise
T. Rowe Price Group, Inc. price-eps-surprise | T. Rowe Price Group, Inc. Quote
Key Factors & Estimates for TROW in Q4
In the October-December quarter, the S&P 500 Index rose 2.4%, indicating favorable market performance. The fixed-income market saw positive flow trends, with solid returns across funds. However, equity markets lagged the fixed-income performance. As a result, asset managers’ performances for the December-end quarter are likely to have benefited from strong fixed-income returns. However, weaker equity markets are likely to have partially offset these gains.
Amid the challenging operating environment, T. Rowe Price is likely to have continued to record net outflows in the third quarter. Per the company’s monthly metrics data, its net outflows were $10.9 billion for the quarter ended Dec. 31, 2024.
The company’s preliminary AUM of $1.61 trillion as of Dec. 31, 2024, decreased 3.6% from Sept. 30, 2024, due to a decline in the Equity market performance.
The Zacks Consensus Estimate for total AUM is pegged at $1.64 trillion, indicating a 3.2% sequential increase. Our estimate for the same is pinned at $1.71 billion.
The Zacks Consensus Estimate for investment advisory fees is pegged at $1.68 billion, suggesting a decline of 2.9% on a sequential basis. Our estimate for the same is pegged at $1.67 billion.
The consensus estimate for administrative, distribution and servicing fees of $154 million implies a 4.1% increase from the prior quarter’s actual. Our estimate for the metric is pegged at $151.7 million.
Coming to expenses, T. Rowe Price incurs significant expenditure to attract investment advisory clients and additional investments from existing clients. Also, the company invests substantially in upgrading technology to align with changing customer needs. Thus, overall expenses are expected to have risen in the quarter under review, impeding bottom-line growth.
Our estimate for operating expenses (GAAP basis) is pegged at $1.33 billion, indicating a 5.7% rise on a sequential basis.
What the Zacks Model Unveils for TROW
According to our proven model, the chances of T. Rowe Price beating the Zacks Consensus Estimate for earnings this time are low. This is because the company does not have the right combination of the two key elements, a positive Earnings ESP and Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold).
You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.
Earnings ESP: The company has an Earnings ESP of -0.87%.
Zacks Rank: T. Rowe Price currently has a Zacks Rank of 3. You can see the complete list of today’s Zacks #1 Rank stocks here.
TROW’s activities in the quarter under review were inadequate to gain analysts’ confidence. As a result, the Zacks Consensus Estimate for fourth-quarter earnings of $2.23 per share has been unchanged over the past seven days. The figure indicates a year-over-year increase of 29.7%.
The consensus estimate for revenues of $1.88 billion implies 14.6% growth from the prior-year quarter’s actual.
Performance of TROW's Peers
Invesco’s IVZ fourth-quarter 2024 adjusted earnings of 52 cents per share surpassed the Zacks Consensus Estimate of 49 cents. Moreover, the bottom line increased 10.6% from the prior-year quarter.
The results primarily gained from a decline in adjusted expenses and higher adjusted net revenues. An increase in the AUM balance on decent inflows was a positive for IVZ.
BlackRock’s BLK fourth-quarter 2024 adjusted earnings of $11.93 per share surpassed the Zacks Consensus Estimate of $11.44. The figure rose 23.5% from the year-ago quarter.
BLK’s results benefited from a rise in revenues. AUM witnessed robust growth and touched the $11.55-trillion mark, driven by net inflows, partially offset by market depreciation and negative forex impacts. However, higher expenses and lower non-operating income acted as headwinds.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
