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T. Rowe Shares Slip 1.4% Despite Impressive Q2 Results
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T. Rowe Shares Slip 1.4% Despite Impressive Q2 Results

T. Rowe Price Group (TROW) surpassed Q2 earnings and revenue estimates on solid growth in assets under management (AUM) during the quarter. However, shares of the investment management company fell 1.4% in pre-market trading session after it cautioned that it expects expenses in 2021 to increase in the range of 12-15%, up from 10-14% previously expected.

The change in guidance is a result of T. Rowe’s partnership with Fidelity National Information Services (FIS).

Quarterly adjusted earnings came in at $3.31 per share, above the analyst’s expectations of $3.16 per share. Also, it increased 44.5% from $2.29 per share reported in the last year’s quarter.

The company reported net revenues of $1.93 billion, up 36.3% from the year-ago period, surpassing consensus estimates of $1.88 billion. Notably, T. Rowe earned investment advisory fees of $1.79 billion, up 38.1% year-over-year. (See T. Rowe stock charts on TipRanks)

Q2 AUM came in at $1.62 trillion, up 33% year-over-year. During the reported quarter, AUM benefitted from net market appreciation and gains of $105.7 billion, partly offset by net outflows of $0.6 billion.

On July 13, Jefferies analyst Daniel Fannon assigned a Buy rating to the stock with a price target of $230 (15.3% upside potential from current levels). The analyst expects T. Rowe to deliver earnings per share of $3.20 in Q3.

Based on 2 Buys, 4 Holds and 1 Sell, the stock has a Hold consensus. The average T. Rowe price target of $196.14 implies 1.4% downside potential from current levels. Shares have gained 7.2% over the past year.

According to TipRanks’ Smart Score system, TROW gets a 7 out of 10, which indicates that the stock is likely to perform in line with market averages.

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