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T. Rowe Price Group, Inc. Just Recorded A 8.3% EPS Beat: Here's What Analysts Are Forecasting Next

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Simply Wall St
·4 min read
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It's been a sad week for T. Rowe Price Group, Inc. (NASDAQ:TROW), who've watched their investment drop 13% to US$127 in the week since the company reported its quarterly result. T. Rowe Price Group reported US$1.6b in revenue, roughly in line with analyst forecasts, although statutory earnings per share (EPS) of US$2.73 beat expectations, being 8.3% higher than what the analysts expected. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

View our latest analysis for T. Rowe Price Group

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Taking into account the latest results, the most recent consensus for T. Rowe Price Group from 13 analysts is for revenues of US$6.55b in 2021 which, if met, would be a solid 10% increase on its sales over the past 12 months. Per-share earnings are expected to swell 19% to US$10.15. Before this earnings report, the analysts had been forecasting revenues of US$6.53b and earnings per share (EPS) of US$10.20 in 2021. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.

It will come as no surprise then, to learn that the consensus price target is largely unchanged at US$144. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. The most optimistic T. Rowe Price Group analyst has a price target of US$170 per share, while the most pessimistic values it at US$120. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.

Of course, another way to look at these forecasts is to place them into context against the industry itself. The analysts are definitely expecting T. Rowe Price Group's growth to accelerate, with the forecast 10% growth ranking favourably alongside historical growth of 8.1% per annum over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 5.1% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect T. Rowe Price Group to grow faster than the wider industry.

The Bottom Line

The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. Fortunately, they also reconfirmed their revenue numbers, suggesting sales are tracking in line with expectations - and our data suggests that revenues are expected to grow faster than the wider industry. The consensus price target held steady at US$144, with the latest estimates not enough to have an impact on their price targets.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for T. Rowe Price Group going out to 2022, and you can see them free on our platform here..

And what about risks? Every company has them, and we've spotted 1 warning sign for T. Rowe Price Group you should know about.

This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com.