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What's in Store for T. Rowe Price (TROW) in Q2 Earnings?

·4 min read

T. Rowe Price Group, Inc. TROW is scheduled to report second-quarter 2022 results before the opening bell on Jul 28. TROW’s earnings and revenues are projected to decline from the year-ago reported figures.

In the last reported quarter, T. Rowe Price’s earnings missed the Zacks Consensus Estimate on lower assets under management (AUM) and rising expenses. Nonetheless, higher revenues were backed by an upsurge in administrative, distribution and servicing fees.

T. Rowe Price has a decent earnings surprise history. Earnings outpaced estimates in two of the trailing four quarters and missed the mark in the other two, the average beat being 0.03%.

T. Rowe Price Group, Inc. Price and EPS Surprise


T. Rowe Price Group, Inc. Price and EPS Surprise
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 of $2.24 for second-quarter earnings has moved 1.8% south over the past week. Moreover, it indicates a decline of 32% from the year-ago quarter’s reported figure.

The Zacks Consensus Estimate of $1.71 billion for revenues suggests an 11.5% rise from the prior-year quarter’s reported number.

Estimates & Key Factors to Note for Q2

In the second quarter, the S&P 500 Index declined 17.2%, indicating unfavorable equity markets. Fixed-income markets saw notable negative performances as fixed-income asset yields increased and prices fell. The Bloomberg U.S. Aggregate Bond Index recorded a decline of 4.7% in the quarter.

Heightening concerns over inflation due to disrupted supply chains, product and material shortages, and high demand (boosted by past fiscal and monetary stimulus activities) also weighed on investor sentiments. Continued geopolitical tensions and the resulting sanctions introduced threats to global economic growth.

Amid the challenging developments, T. Rowe Price is likely to have recorded net outflows every month in the second quarter of 2022. The preliminary month-end AUM of $1.31 trillion as of Jun 30, 2022, compares unfavorably with $1.55 trillion as of Apr 30, 2022.

Such a decline in AUM, owing to market fluctuations and foreign exchange translations, is expected to have affected TROW’s investment management business. The consensus estimate for investment advisory fees of $1.6 billion indicates a fall of 3.7% from the previous quarter’s reported figure.

Also, the consensus estimate for administrative, distribution and servicing fees of $143 million indicates a fall of 8.9% from the previous quarter’s reported figure.

Coming to expenses,T. Rowe Price is expected to have incurred higher employee expenses due to rising salaries on account of inflation. 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.

Earnings Whispers

The proven Zacks model does not predict an earnings beat for T. Rowe Price this time around. This is because T. Rowe Price does not have the right combination of the two key ingredients — a positive Earnings ESP and a Zacks Rank #3 (Hold) or higher — for increasing the odds of an earnings beat.

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 5 (Strong Sell).

Stocks That Warrant a Look

A couple of finance stocks, which you may want to consider as these have the right combination of elements to post an earnings beat in their upcoming releases, per our model, are Lazard Ltd LAZ and First Interstate BancSystem FIBK.

The Earnings ESP for Lazard is +2.04% and it carries a Zacks Rank #3 at present. LAZ is slated to report second-quarter 2022 results on Jul 28.

First Interstate BancSystem is scheduled to release the second-quarter results on Jul 26. FIBK currently sports a Zacks Rank #1 (Strong Buy) and has an Earnings ESP of +7.14%. You can see the complete list of today’s Zacks #1 Rank stocks here.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.

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T. Rowe Price Group, Inc. (TROW) : Free Stock Analysis Report
Lazard Ltd (LAZ) : Free Stock Analysis Report
First Interstate BancSystem, Inc. (FIBK) : Free Stock Analysis Report
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