On Mar 7, 2017, we issued an updated research report on T. Rowe Price Group, Inc. (TROW - Free Report) . The company’s shares gained 5.1% in the last six months, underperforming the 11.8% growth for the Zacks categorized Investment Management industry. This dismal performance was due to escalating expenses and near-term concerns related to investment advisory fees (comprising 88% of total revenue) as the changes in assets under management (AUM), owing to market fluctuations, foreign exchange translations and regulatory changes, could hurt this revenue source.
Here are a few concerns that led the stock to underperform the broader industry so far:
Firstly, escalating operating expenses remain a major concern for T. Rowe Price. The company incurs significant expenditures to attract new investment advisory clients and additional investments from existing clients. Notably, due to its several planned strategic initiatives, T. Rowe Price projects operating expenses to grow in the high single-digit range for 2017 (excluding the charge tied with Dell appraisal rights matter).
Secondly, in order to maintain a positive yield for fund investors, the company continues to waive fees in its money market mutual funds and trusts, which is likely to continue in 2017 at a minimal level.
Thirdly, over the last 60 days, the Zacks Consensus Estimate for the stock moved down nearly 2.2% to $4.79 for the current year.
However, revenue growth, debt-free position with substantial liquidity and strong capital deployment activities are key strengths of T. Rowe Price. The mix shift toward international growth funds is also likely to increase both revenue and investment management margin of the company.
In addition, the company remains focused on fortifying business through several initiatives largely tied with launching investment strategies and vehicles, enhancing client engagement capabilities in each distribution channel, strengthening distribution channels in the U.S., EMEA, and Asia Pacific, improving its technology platform and deriving long-term cost efficiencies.
Currently, T. Rowe Price carries a Zacks Rank #3 (Hold).
Stocks to Consider
Bank of America Corporation (BAC - Free Report) has been witnessing upward estimate revisions for the last 60 days. Further, the stock surged over 60% over the past six months. It currently carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
U.S. Bancorp (USB - Free Report) has been witnessing upward estimate revisions for the last 60 days. Also, the company’s shares have risen nearly 26.7% over the last six months. It presently holds a Zacks Rank #2.
Enterprise Financial Services Corp (EFSC - Free Report) has been witnessing upward estimate revisions for the last 60 days. Over the last six months, the company’s share price has been up more than 41%. It carries a Zacks Rank #2.
8 Stocks with Huge Profit Potential
Just released: Driverless Cars: Your Roadmap to Mega-Profits Today. In this latest Special Report, Zacks’ Aggressive Growth Strategist Brian Bolan explores a full-blown technological breakthrough in the making – autonomous cars. He also spotlights 8 stocks with tremendous gain potential to feed off this phenomenon. Click to see the stocks right now >>
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
On Mar 7, 2017, we issued an updated research report on T. Rowe Price Group, Inc. (TROW - Free Report) . The company’s shares gained 5.1% in the last six months, underperforming the 11.8% growth for the Zacks categorized Investment Management industry. This dismal performance was due to escalating expenses and near-term concerns related to investment advisory fees (comprising 88% of total revenue) as the changes in assets under management (AUM), owing to market fluctuations, foreign exchange translations and regulatory changes, could hurt this revenue source.
Here are a few concerns that led the stock to underperform the broader industry so far:
Firstly, escalating operating expenses remain a major concern for T. Rowe Price. The company incurs significant expenditures to attract new investment advisory clients and additional investments from existing clients. Notably, due to its several planned strategic initiatives, T. Rowe Price projects operating expenses to grow in the high single-digit range for 2017 (excluding the charge tied with Dell appraisal rights matter).
Secondly, in order to maintain a positive yield for fund investors, the company continues to waive fees in its money market mutual funds and trusts, which is likely to continue in 2017 at a minimal level.
Thirdly, over the last 60 days, the Zacks Consensus Estimate for the stock moved down nearly 2.2% to $4.79 for the current year.
However, revenue growth, debt-free position with substantial liquidity and strong capital deployment activities are key strengths of T. Rowe Price. The mix shift toward international growth funds is also likely to increase both revenue and investment management margin of the company.
In addition, the company remains focused on fortifying business through several initiatives largely tied with launching investment strategies and vehicles, enhancing client engagement capabilities in each distribution channel, strengthening distribution channels in the U.S., EMEA, and Asia Pacific, improving its technology platform and deriving long-term cost efficiencies.
Currently, T. Rowe Price carries a Zacks Rank #3 (Hold).
Stocks to Consider
Bank of America Corporation (BAC - Free Report) has been witnessing upward estimate revisions for the last 60 days. Further, the stock surged over 60% over the past six months. It currently carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
U.S. Bancorp (USB - Free Report) has been witnessing upward estimate revisions for the last 60 days. Also, the company’s shares have risen nearly 26.7% over the last six months. It presently holds a Zacks Rank #2.
Enterprise Financial Services Corp (EFSC - Free Report) has been witnessing upward estimate revisions for the last 60 days. Over the last six months, the company’s share price has been up more than 41%. It carries a Zacks Rank #2.
8 Stocks with Huge Profit Potential
Just released: Driverless Cars: Your Roadmap to Mega-Profits Today. In this latest Special Report, Zacks’ Aggressive Growth Strategist Brian Bolan explores a full-blown technological breakthrough in the making – autonomous cars. He also spotlights 8 stocks with tremendous gain potential to feed off this phenomenon. Click to see the stocks right now >>
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
Get the latest research report on BAC - FREE
Get the latest research report on USB - FREE
Get the latest research report on TROW - FREE
Get the latest research report on EFSC - FREE