Does the Recent 4.7% Jump Signal Opportunity in T. Rowe Price Group Stock for 2025?

Deciding what to do with T. Rowe Price Group stock? You’re not alone. Whether you own shares, have the company on your watchlist, or are simply curious about potential opportunities in the wealth management space, this is a juncture that demands some fresh thought. The past week saw T. Rowe pop 4.7%, rebounding from a difficult start to the year where the stock has lagged, down 6.7% since January. But as you zoom out, the story gets a bit more nuanced: a respectable 3.5% gain over the last year and an impressive 24.0% jump across three years show that momentum hasn’t skipped this name altogether, though the trailing five-year return is still underwater at -9.5%.

Those swings aren’t happening in a vacuum. Shifts in markets and investor sentiment toward asset managers have been driving the price lately, with broader focus on fee pressures and competition from low-cost passive funds. Yet, when you break down the fundamentals, T. Rowe Price Group comes out looking a bit special. On our valuation scorecard, the company checks off 5 out of 6 boxes as undervalued. That puts its value score at a strong 5, suggesting deep value potential for those willing to look past the headlines and dig a little deeper.

Of course, knowing the score is just the start. Let’s break down how T. Rowe Price Group stacks up through different valuation lenses, and then I’ll share an even more powerful approach to understanding what this number really means for investors like you.

Why T. Rowe Price Group is lagging behind its peers

Approach 1: T. Rowe Price Group Excess Returns Analysis

The Excess Returns valuation model focuses on how much the company earns above its cost of equity. In simple terms, this model estimates the extra value T. Rowe Price Group generates from its invested capital after accounting for the return that shareholders require. A company with substantial and sustained excess returns is typically well-positioned to create long-term value.

For T. Rowe Price Group, key figures stand out:

• Book Value: $48.02 per share
• Stable EPS: $9.84 per share (Source: Weighted future Return on Equity estimates from 6 analysts.)
• Cost of Equity: $4.13 per share
• Excess Return: $5.71 per share
• Average Return on Equity: 19.38%
• Stable Book Value: $50.75 per share (Source: Weighted future Book Value estimates from 3 analysts.)

These fundamentals signal above-average profitability. The model suggests an intrinsic value of $163.81 per share for T. Rowe Price Group, which implies the stock is 35.4% undervalued compared to recent prices. This margin of safety is significant and indicates attractive upside for investors able to see past short-term noise.

Result: UNDERVALUED

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for T. Rowe Price Group.

Our Excess Returns analysis suggests T. Rowe Price Group is undervalued by 35.4%. Track this in your watchlist or portfolio, or discover more undervalued stocks.

Approach 2: T. Rowe Price Group Price vs Earnings

For companies like T. Rowe Price Group that generate reliable profits, the Price-to-Earnings (PE) ratio is a time-tested way to assess stock valuation. The PE ratio relates a company’s share price to its earnings per share, effectively summarizing how much investors are willing to pay today for a dollar of future profits. Generally, higher PE ratios are justified for companies with faster growth or lower risk, while lower PEs can signal either a value opportunity or underlying challenges.

T. Rowe Price Group currently trades at a PE of 11.7x, which stands in stark contrast to both the Capital Markets industry average of 25.5x and the peer average of 22.5x. On the surface, this significant discount might imply that the market is cautious about the company’s growth prospects or competitive positioning. However, these benchmark comparisons do not consider business-specific factors that matter for valuation.

This is where Simply Wall St’s “Fair Ratio” comes in. The Fair PE Ratio for T. Rowe Price Group is calculated at 16.1x, reflecting a tailored view that blends expected earnings growth, risk, profit margins, industry trends, and company size. Unlike crude peer or industry comparisons, the Fair Ratio aims to answer what multiple truly fits T. Rowe’s unique story.

With T. Rowe’s current 11.7x PE well below the 16.1x Fair Ratio, the stock looks undervalued by this approach. The market may be underpricing the company’s long-term prospects given its profitability and position in wealth management.

Result: UNDERVALUED

PE ratios tell one story, but what if the real opportunity lies elsewhere? Discover companies where insiders are betting big on explosive growth.

Upgrade Your Decision Making: Choose your T. Rowe Price Group Narrative

Earlier we mentioned that there’s an even better way to understand valuation. Let’s introduce you to Narratives. Narratives are a new approach that allows you to build your own story about a company like T. Rowe Price Group by combining your assumptions on revenue, margins, and future prospects with your outlook on risks and growth. With Narratives, you connect your perspective to an actual financial forecast, which then calculates your fair value for the stock. This makes it much easier to see whether you think shares are undervalued or not.

This tool is accessible right on Simply Wall St’s Community page, where millions of investors shape and adjust their Narratives as new information comes in, from earnings updates to industry-changing news. Narratives are dynamic and automatically update as fresh data flows in, so you can quickly see how developments impact your view.

Comparing your fair value estimate to the market price helps you decide whether it is time to buy, sell, or hold. For example, some T. Rowe Price Group Narratives are bullish, reflecting expectations of growth from new retirement solutions and global ETFs, resulting in a fair value above $116. Others take a more cautious view due to industry competition and fee compression, putting fair value closer to $91. No matter your angle, Narratives make informed, story-driven investing simple and personal.

Do you think there's more to the story for T. Rowe Price Group? Create your own Narrative to let the Community know!

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.

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