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T. Rowe Price Crafts 52-Week High

Zacks Equity Research

Shares of T. Rowe Price Group, Inc. (TROW) crafted a new 52-week high, touching $83.92 at the beginning of the trading session on Dec 27. However, this asset management holding company closed the session at $83.43, which reflects a solid year-to-date return of 27.1%. The trading volume for the session was 878,312 shares.

Despite hitting its 52-week high, this Zacks Rank #3 (Hold) stock has plenty of upside left, given its strong estimate revisions over the last 60 days and expected long-term earnings growth of 12.31%.

Growth Drivers

Impressive third-quarter 2013 results – including a positive earnings surprise of 4.2% and top-line growth – as well as a strong capital position were the primary growth drivers for T. Rowe Price.

On Oct 24, T. Rowe Price reported its third-quarter 2013 earnings of $1.00 per share, outpacing the Zacks Consensus Estimate of 96 cents by 4.2%. Moreover, results surpassed the prior-year quarter earnings of 87 cents by 14.9%.

A year-over-year increase of 14.9% in revenue, debt-free position and increased assets under management were the tailwinds for the quarter. However, an 11.6% rise in operating expenses acted as the headwind for the quarter.

Notably, to expand international facilities along with the update of its technology capabilities to fulfill increasing business demands, T. Rowe Price incurred additional costs. The company expects these costs to mount in fourth-quarter 2013 around 10% sequentially as two new buildings located at its Owings Mills, Md. campus are under service.

Estimate Revisions Show Potency

Over the last 60 days, the Zacks Consensus Estimate for 2013 increased slightly to $3.83 per share. For 2014, the Zacks Consensus Estimate advanced 1.0% to $4.25 per share, over the same time frame.

Some better-ranked investment management companies worth considering include Waddell & Reed Financial, Inc. (WDR), Virtus Investment Partners, Inc. (VRTS) and GAMCO Investors, Inc. (GBL). All 3 companies carry a Zacks Rank #1 (Strong Buy).

Read the Full Research Report on TROW
Read the Full Research Report on WDR
Read the Full Research Report on VRTS
Read the Full Research Report on GBL

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