T. Rowe Price Group (NASDAQ:TROW) Releases Earnings Results, Beats Expectations By $0.23 EPS

Key Points

• T. Rowe Price beat quarterly expectations: EPS came in at $2.86 versus the $2.63 consensus, while revenue reached approximately $2.0 billion, up 5.9% year over year.
• Client outflows remain the main concern: Net outflows totaled $28.3 billion in Q3, driven by equity strategies, mutual funds, and a large target-date plan redemption, although management expects sequential improvement in Q4.
• Growth initiatives are gaining traction: ETF inflows reached $3.8 billion for the quarter, lifting ETF assets under management to $33.8 billion, while the company continues investing in fixed income, wealth management, SMAs, retirement solutions, and AI-enabled operations.

T. Rowe Price Group (NASDAQ:TROW - Get Free Report) issued its earnings results on Thursday. The asset manager reported $2.86 earnings per share (EPS) for the quarter, topping analysts' consensus estimates of $2.63 by $0.23, FiscalAI reports. The business had revenue of $2 billion for the quarter, compared to analysts' expectations of $1.98 billion. T. Rowe Price Group had a return on equity of 20.91% and a net margin of 29.26%. The company's quarterly revenue was up 5.9% on a year-over-year basis. During the same period in the previous year, the firm posted $2.81 EPS.

Here are the key takeaways from T. Rowe Price Group's conference call:

• Net outflows remained elevated at $28.3 billion in Q3, driven by equity strategies, mutual funds, and a $7.6 billion multi-asset outflow that included a large target-date plan redemption. Management expects Q4 flows to improve sequentially, but still remain pressured by active equity and mutual fund trends.
• Investment performance improved across several areas, with more than 50% of fund assets outperforming peers over one-, three-, and 10-year periods. Fixed income remained particularly strong, with 74% to 85% of assets outperforming over the reported time horizons.
• The ETF franchise continued to gain momentum, generating $3.8 billion of Q3 inflows and reaching $33.8 billion in AUM, up from $6.9 billion two years ago. The planned acquisition of F/m Investments is expected to further strengthen T. Rowe Price’s fixed-income, ETF, and SMA capabilities.
• Earnings benefited from higher average AUM, with adjusted diluted EPS increasing to $2.86 from $2.57 in Q2 and $2.81 a year earlier. Adjusted net revenue rose 5.3% year over year to $2.0 billion, while carried interest increased substantially to $63.1 million.
• Management is investing in longer-term growth through SMAs, customized models, retirement solutions, strategic partnerships, and AI-enabled workflows. Executives expect AI to improve investment research and operational efficiency over the next 12–24 months, but acknowledged that measurable benefits will take time to emerge.

T. Rowe Price Group Stock Performance

NASDAQ:TROW traded up $1.39 during mid-day trading on Thursday, hitting $105.39. The company had a trading volume of 1,187,190 shares, compared to its average volume of 2,067,653. T. Rowe Price Group has a fifty-two week low of $85.22 and a fifty-two week high of $122.00. The firm has a market cap of $22.48 billion, a P/E ratio of 10.56, a P/E/G ratio of 3.05 and a beta of 1.45. The business's fifty day moving average is $105.93 and its two-hundred day moving average is $103.72.

T. Rowe Price Group Announces Dividend

The firm also recently declared a quarterly dividend, which was paid on Tuesday, September 29th. Stockholders of record on Tuesday, September 15th were given a dividend of $1.30 per share. The ex-dividend date was Tuesday, September 15th. This represents a $5.20 annualized dividend and a dividend yield of 4.9%. T. Rowe Price Group's payout ratio is currently 52.16%.

Analyst Upgrades and Downgrades

Several equities analysts recently weighed in on TROW shares. Zacks Research lowered shares of T. Rowe Price Group from a "strong-buy" rating to a "hold" rating in a research report on Thursday, August 13th. Morgan Stanley boosted their target price on T. Rowe Price Group from $110.00 to $112.00 and gave the stock an "equal weight" rating in a report on Friday, October 23rd. UBS Group started coverage on T. Rowe Price Group in a research report on Wednesday, October 7th. They issued a "neutral" rating and a $107.00 price target on the stock. BMO Capital Markets cut their target price on shares of T. Rowe Price Group from $120.00 to $110.00 and set a "market perform" rating for the company in a research note on Tuesday, October 13th. Finally, Weiss Ratings raised T. Rowe Price Group from a "hold (c+)" rating to a "buy (b-)" rating in a research report on Friday, September 4th. One equities research analyst has rated the stock with a Buy rating, ten have issued a Hold rating and three have issued a Sell rating to the company. According to data from MarketBeat, T. Rowe Price Group has an average rating of "Reduce" and a consensus target price of $104.23.

Insiders Place Their Bets

In other news, VP Joshua Nelson sold 10,000 shares of the business's stock in a transaction on Tuesday, August 25th. The shares were sold at an average price of $111.82, for a total value of $1,118,200.00. Following the completion of the transaction, the vice president owned 71,328 shares of the company's stock, valued at $7,975,896.96. The trade was a 12.30% decrease in their position. The sale was disclosed in a filing with the Securities & Exchange Commission, which is available at this hyperlink. Company insiders own 1.60% of the company's stock.

T. Rowe Price Group News Roundup

Here are the key news stories impacting T. Rowe Price Group this week:

• Positive Sentiment: Earnings and revenue beat estimates: Q3 2026 adjusted earnings were $2.86 per share, above the $2.63 consensus estimate and up from $2.81 a year earlier. Revenue reached approximately $2.0 billion, exceeding the $1.98 billion forecast and rising 5.9% year over year. T. Rowe Price Group Reports Third Quarter 2026 Results
• Positive Sentiment: Profitability remained strong: T. Rowe Price reported a 20.91% return on equity and a 29.26% net margin, supporting the investment case for the asset manager despite a challenging operating environment. T. Rowe Price Earnings Call
• Positive Sentiment: Wealth-management expansion: The company is adding more than 50 wealth-management positions, signaling continued investment in a distribution channel that could broaden future growth and diversify its business. T. Rowe Price Group Adds Over 50 Wealth Management Roles
• Neutral Sentiment: Valuation remains relatively low: TROW trades at approximately 10.6 times earnings, which may appeal to value-oriented investors, although the valuation reflects concerns about long-term asset-growth and flow trends.
• Negative Sentiment: Assets under management declined: The quarterly revenue and earnings beats occurred even as AUM dipped, highlighting continued sensitivity to market performance and client flows. Net outflows and rising costs remain key risks to earnings growth. T. Rowe Price Q3 Earnings, Revenue Beat Even as AUM Dips

T. Rowe Price Group Company Profile

T. Rowe Price Group, Inc is a global investment management firm headquartered in Baltimore, Maryland. Founded in 1937 by Thomas Rowe Price Jr., the company provides investment strategies and advisory services to individual investors, retirement plans, financial intermediaries, institutions and other clients.

The company offers a range of actively managed and multi-asset investment products, including mutual funds, exchange-traded funds, separately managed accounts and other portfolio solutions.

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