T. Rowe Price Group, Inc. Just Beat EPS By 26%: Here's What Analysts Think Will Happen Next

T. Rowe Price Group, Inc. (NASDAQ:TROW) just released its quarterly report and things are looking bullish. It was overall a positive result, with revenues beating expectations by 2.8% to hit US$1.8b. T. Rowe Price Group also reported a statutory profit of US$2.49, which was an impressive 26% above what the analysts had forecast. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

View 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$7.05b in 2024. If met, it would imply an okay 5.7% increase on its revenue over the past 12 months. Statutory earnings per share are expected to reduce 2.5% to US$8.26 in the same period. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$7.07b and earnings per share (EPS) of US$8.23 in 2024. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.

The analysts reconfirmed their price target of US$115, showing that the business is executing well and in line with expectations. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. Currently, the most bullish analyst values T. Rowe Price Group at US$125 per share, while the most bearish prices it at US$101. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or thatthe analysts have a strong view on its prospects.

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 7.6% annualised growth to the end of 2024 ranking favourably alongside historical growth of 4.1% per annum over the past five years. Other similar companies in the industry (with analyst coverage) are also forecast to grow their revenue at 6.9% per year. T. Rowe Price Group is expected to grow at about the same rate as its industry, so it's not clear that we can draw any conclusions from its growth relative to competitors.

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. Happily, there were no real changes to revenue forecasts, with the business still expected to grow in line with the overall industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple T. Rowe Price Group analysts - 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 makes us a bit uncomfortable!) 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.