4. T. Rowe Price Group, Inc. (NASDAQ:TROW)
52 Week Range: 91.37 – 125.81
Current Share Price: $93.04
Analyst Upside Potential: 17.15%
1-Year Performance: -18.63%
Number of Hedge Fund Holders: 33
T. Rowe Price Group, Inc. (NASDAQ:TROW) is a global financial services holding company specializing in investment management and advisory services. It offers a broad range of investment solutions, including equity, fixed-income, multi-asset, and alternative strategies. Its services are tailored for various clients such as individuals, advisors, institutions, and retirement plan sponsors.
On March 13, Analyst Michael Brown from Wells Fargo maintained a Hold rating on the stock, with a price target of $116. This decision reflects mixed market conditions and challenges faced by the company, particularly a 1.4% decline in assets under management (AUM) in February 2025. The analyst noted that the drop was driven by a weak US equity market and net outflows of $4.7 billion, with significant outflows from US mutual funds, which are a core part of T. Rowe Price Group, Inc.’s (NASDAQ:TROW) business. Moreover, despite some positive trends, including strong inflows into ETFs and target date funds, the company’s high exposure to equities, especially growth-oriented funds, has been a headwind amid recent market volatility. The company is currently trading close to its 52-week low, thereby ranking as one of the worst depressed stocks to buy now.
Lindsell Train stated the following regarding T. Rowe Price Group, Inc. (NASDAQ:TROW) in its Q3 2024 investor letter:
“T. Rowe Price Group, Inc. (NASDAQ:TROW) is the only asset manager held in your Fund. The headwinds to this industry, notably the long-term shift to passive and resultant fee pressures, are well known, leading to mouthwatering valuations for what can be extremely profitable companies. In our view T. Rowe stands out with trillion-dollar scale, exceptional margins, and a long track-record of headwind-defying growth, affording it a place in our portfolio since inception. Its shares, however, have not been stellar performers over this four-year+ period, returning just c.30% in USD vs. the MSCI North America’s c.120%. In this month’s update we outline our reasons for continued optimism.
Founded back in 1937 by renowned growth investor Thomas Rowe Price Jr. (a pioneer of basing fees on assets), the eponymous T. Rowe Price is now one of the biggest active managers in the US with $1.6tn under management. This gives it the rare attributes of heritage, a resonant brand, and vast scale. With costs generally fixed (excepting c.30% of variable compensation) asset management thrives on operating leverage, with T. Rowe no exception, leveraging its scale to deliver at least 30% operating margins every year for three decades. Returns to equity bound between 20-and 30%, and with over $2bn of net cash on the balance sheet, almost all earnings are returned to shareholders via buybacks and a generous 4.5% dividend yield…” (Click here to read the full text)
