Analysts Are Updating Their T. Rowe Price Group, Inc. (NASDAQ:TROW) Estimates After Its Yearly Results

Last week, you might have seen that T. Rowe Price Group, Inc. (NASDAQ:TROW) released its annual result to the market. The early response was not positive, with shares down 3.1% to US$106 in the past week. The result was positive overall - although revenues of US$6.5b were in line with what the analysts predicted, T. Rowe Price Group surprised by delivering a statutory profit of US$7.76 per share, modestly greater than 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. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

See our latest analysis for T. Rowe Price Group

Taking into account the latest results, the most recent consensus for T. Rowe Price Group from nine analysts is for revenues of US$6.73b in 2024. If met, it would imply a credible 4.2% increase on its revenue over the past 12 months. Statutory earnings per share are expected to decrease 6.1% to US$7.50 in the same period. Before this earnings report, the analysts had been forecasting revenues of US$6.69b and earnings per share (EPS) of US$7.30 in 2024. So the consensus seems to have become somewhat more optimistic on T. Rowe Price Group's earnings potential following these results.

The consensus price target was unchanged at US$104, implying that the improved earnings outlook is not expected to have a long term impact on value creation for shareholders. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. There are some variant perceptions on T. Rowe Price Group, with the most bullish analyst valuing it at US$114 and the most bearish at US$92.00 per share. Still, with such a tight range of estimates, it suggeststhe analysts have a pretty good idea of what they think the company is worth.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the T. Rowe Price Group's past performance and to peers in the same industry. The period to the end of 2024 brings more of the same, according to the analysts, with revenue forecast to display 4.2% growth on an annualised basis. That is in line with its 4.7% annual growth over the past five years. Compare this with the broader industry (in aggregate), which analyst estimates suggest will see revenues grow 6.6% annually. So although T. Rowe Price Group is expected to maintain its revenue growth rate, it's forecast to grow slower than the wider industry.

The Bottom Line

The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards T. Rowe Price Group following these results. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. The consensus price target held steady at US$104, with the latest estimates not enough to have an impact on their price targets.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have forecasts for T. Rowe Price Group going out to 2026, and you can see them free on our platform here.

We don't want to rain on the parade too much, but we did also find 2 warning signs for T. Rowe Price Group (1 is significant!) that you need to be mindful of.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.