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What's in Store for T. Rowe Price (TROW) in Q3 Earnings?
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T. Rowe Price Group, Inc. (TROW - Free Report) is scheduled to report third-quarter 2023 results on Oct 27, before the opening bell. TROW’s quarterly revenues are expected to have witnessed a year-over-year improvement, while its earnings are likely to have declined.
In the last reported quarter, the company’s earnings surpassed the Zacks Consensus Estimate. Net revenues also increased because of a rise in assets under management (AUM).
T. Rowe Price’s earnings outpaced the Zacks Consensus Estimate in all the trailing four quarters, the average surprise being 6.31%.
TROW’s activities in the quarter were inadequate to gain analysts’ confidence. As a result, the Zacks Consensus Estimate for third-quarter earnings of $1.76 per share has moved 1.1% south over the past week. Moreover, the figure indicates a decline of 5.4% from the year-ago quarter. Our estimate for the metric is $1.69.
The consensus estimate for revenues of $1.64 billion indicates 3% growth from the prior-year quarter. Our estimate stands at $1.62 billion.
Key Factors & Estimates for Q3
The performance of asset managers in the third quarter is expected to have been affected by transitory challenges in the industry. In the third quarter, the S&P 500 Index declined 3.1%, indicating unfavorable equity markets.
Secular trends like market share tilt from active to passive; open-ended mutual funds to exchange-traded funds, collective investment trusts and SMAs; and public markets to private markets are expected to have affected TROW’s quarterly performance.
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, it recorded net outflows of $17.4 billion in the quarter under review.
This is expected to have affected its total AUM balance. As of Sep 30, 2023, TROW’s preliminary AUM balance of $1.35 trillion indicates a fall of 3.8% from the June-end figure.
Despite such a decline in AUM balance, the Zacks Consensus Estimate for investment advisory fees of $1.48 billion suggests an increase of 3.1% from the previous quarter. Our projection for the metric is $1.46 billion.
The consensus estimate for administrative, distribution and servicing fees of $141 million remained unchanged sequentially. Our estimate for the metric stands at $140.8 million.
Coming to expenses, T. Rowe Price invests substantially to upgrade technology to align with changing customer needs. The company’s initiatives to attract investment advisory clients and additional investments from its existing clients are expected to have led to significant expenditure. Thus, overall expenses are expected to have risen in the quarter under review, impeding bottom-line growth. Our estimate for operating expenses (GAAP basis) stands at $1.15 billion.
What the Zacks Model Unveils
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’re reported with our Earnings ESP Filter.
Earnings ESP: T. Rowe Price has an Earnings ESP of 0.00%.
Zacks Rank: T. Rowe Price currently carries a Zacks Rank of 3.
Stocks to Consider
First Citizens BancShares, Inc. (FCNCA - Free Report) and Cullen/Frost Bankers (CFR - Free Report) are a couple of stocks you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat in their upcoming releases.
The Earnings ESP for FCNCA is +3.85% and the stock currently carries a Zacks Rank #2. It is slated to report third-quarter 2023 results on Oct 26.
The Zacks Consensus Estimate for FCNCA’s third-quarter earnings has moved 2.7% north over the past 30 days.
Image: Bigstock
What's in Store for T. Rowe Price (TROW) in Q3 Earnings?
T. Rowe Price Group, Inc. (TROW - Free Report) is scheduled to report third-quarter 2023 results on Oct 27, before the opening bell. TROW’s quarterly revenues are expected to have witnessed a year-over-year improvement, while its earnings are likely to have declined.
In the last reported quarter, the company’s earnings surpassed the Zacks Consensus Estimate. Net revenues also increased because of a rise in assets under management (AUM).
T. Rowe Price’s earnings outpaced the Zacks Consensus Estimate in all the trailing four quarters, the average surprise being 6.31%.
T. Rowe Price Group, Inc. Price and EPS Surprise
T. Rowe Price Group, Inc. price-eps-surprise | T. Rowe Price Group, Inc. Quote
TROW’s activities in the quarter were inadequate to gain analysts’ confidence. As a result, the Zacks Consensus Estimate for third-quarter earnings of $1.76 per share has moved 1.1% south over the past week. Moreover, the figure indicates a decline of 5.4% from the year-ago quarter. Our estimate for the metric is $1.69.
The consensus estimate for revenues of $1.64 billion indicates 3% growth from the prior-year quarter. Our estimate stands at $1.62 billion.
Key Factors & Estimates for Q3
The performance of asset managers in the third quarter is expected to have been affected by transitory challenges in the industry. In the third quarter, the S&P 500 Index declined 3.1%, indicating unfavorable equity markets.
Secular trends like market share tilt from active to passive; open-ended mutual funds to exchange-traded funds, collective investment trusts and SMAs; and public markets to private markets are expected to have affected TROW’s quarterly performance.
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, it recorded net outflows of $17.4 billion in the quarter under review.
This is expected to have affected its total AUM balance. As of Sep 30, 2023, TROW’s preliminary AUM balance of $1.35 trillion indicates a fall of 3.8% from the June-end figure.
Despite such a decline in AUM balance, the Zacks Consensus Estimate for investment advisory fees of $1.48 billion suggests an increase of 3.1% from the previous quarter. Our projection for the metric is $1.46 billion.
The consensus estimate for administrative, distribution and servicing fees of $141 million remained unchanged sequentially. Our estimate for the metric stands at $140.8 million.
Coming to expenses, T. Rowe Price invests substantially to upgrade technology to align with changing customer needs. The company’s initiatives to attract investment advisory clients and additional investments from its existing clients are expected to have led to significant expenditure. Thus, overall expenses are expected to have risen in the quarter under review, impeding bottom-line growth. Our estimate for operating expenses (GAAP basis) stands at $1.15 billion.
What the Zacks Model Unveils
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’re reported with our Earnings ESP Filter.
Earnings ESP: T. Rowe Price has an Earnings ESP of 0.00%.
Zacks Rank: T. Rowe Price currently carries a Zacks Rank of 3.
Stocks to Consider
First Citizens BancShares, Inc. (FCNCA - Free Report) and Cullen/Frost Bankers (CFR - Free Report) are a couple of stocks you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat in their upcoming releases.
The Earnings ESP for FCNCA is +3.85% and the stock currently carries a Zacks Rank #2. It is slated to report third-quarter 2023 results on Oct 26.
The Zacks Consensus Estimate for FCNCA’s third-quarter earnings has moved 2.7% north over the past 30 days.
CFR currently has an Earnings ESP of +1.00% and a Zacks Rank #3. It is scheduled to release third-quarter 2023 results on Oct 26. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for CFR’s third-quarter earnings has remained unchanged over the past month.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.