TROW: Rising Price Expectations Will Clash With Persistent Outflows Ahead

The Analyst Price Target for T. Rowe Price Group has been raised by analysts from $79.23 to $87.43 as they factor in stronger revenue growth, higher profit margins, and improved operating efficiencies despite ongoing industry wide flow headwinds.

Analyst Commentary

Recent research updates highlight a more nuanced stance on T. Rowe Price Group, with higher price targets reflecting improved earnings power, but tempered by persistent concerns around organic growth and fund flows. While cost discipline and market performance have supported near term upside to estimates, analysts remain divided on the durability of these earnings and the stock's valuation.

Several bearish analysts have maintained cautious ratings even as they lift price targets, arguing that the shares already discount much of the expected efficiency gains and market tailwinds. They emphasize that sustained improvement in flows and franchise level growth will be critical to justify further multiple expansion.

JPMorgan, for example, acknowledges the higher earnings outlook but continues to flag ongoing outflows through Q3 as a key risk to the growth narrative and relative positioning within traditional asset managers.

Bearish Takeaways

• Bearish analysts view the recent price target increases as largely a reflection of stronger markets and expense discipline, not a fundamental inflection in organic growth or competitive positioning.
• Persistent net outflows in Q3 reinforce concerns that T. Rowe Price may struggle to reaccelerate organic growth, raising questions around the sustainability of current valuation levels.
• Some research points to execution risk in turning strategic efficiency initiatives into durable margin expansion, especially if flows remain soft and revenue growth slows.
• Higher price targets from major firms like JPMorgan come alongside Underweight or equivalent ratings, underscoring a view that risk reward remains skewed to the downside relative to peers in the traditional asset management group.

What's in the News

• T. Rowe Price expanded its active fixed income ETF lineup with four new funds, including short, long, and high income municipal ETFs and a multi sector income ETF, bringing its active ETF roster to 28 offerings (Key Developments).
• The new municipal bond ETFs broaden the firm's federally tax free options across short term, long term, and high yield strategies, complementing its existing intermediate municipal income ETF launched in 2024 (Key Developments).
• The T. Rowe Price Multi Sector Income ETF now offers exposure across the global fixed income universe, spanning multiple credit sectors, countries, and currencies, and is managed by a team of experienced portfolio managers (Key Developments).
• Since launching its first active ETFs in 2020, T. Rowe Price has built a lineup of 10 fixed income and 18 equity active ETFs, emphasizing tax efficiency, competitive expenses, and intraday liquidity versus traditional mutual funds (Key Developments).
• Between July 1 and September 30, 2025, the company repurchased about 1.46 million shares for $153.55 million, completing a long running buyback program totaling over 130 million shares and $10.7 billion since 2003 (Key Developments).

Valuation Changes

• The fair value estimate has risen meaningfully from $79.23 to $87.43, reflecting stronger projected earnings power.
• The discount rate has increased modestly from 7.14 to 8.14, implying a slightly higher required return and risk assessment.
• The revenue growth outlook has shifted from a slight contraction of approximately 0.6 percent to positive growth of about 2.6 percent, signaling improved top line expectations.
• The net profit margin has expanded significantly from roughly 28.2 percent to 34.8 percent, indicating higher anticipated operating efficiency and profitability.
• The future P/E multiple has declined notably from about 10.9x to 8.4x, suggesting the shares are modeled as cheaper relative to forward earnings even as the fair value estimate has increased.