T. Rowe Price Group, Inc. TROW is scheduled to report first-quarter 2025 results on May 2, before the opening bell. The company’s quarterly earnings are expected to have declined, while revenues are likely to have witnessed an improvement from the year-ago reported level.

In the last reported quarter, TROW’s earnings lagged the Zacks Consensus Estimate. The company's results were affected by higher expenses. Nonetheless, net revenues were supported by a rise in assets under management (AUM). Appreciation in cash and cash equivalents will help the company continue investing.

T. Rowe Price’s earnings outpaced the Zacks Consensus Estimate in three of the trailing four quarters and missed once, the average surprise being 5.71%. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)

T. Rowe Price Group, Inc. Price and EPS SurpriseT. Rowe Price Group, Inc. Price and EPS Surprise

T. Rowe Price Group, Inc. price-eps-surprise | T. Rowe Price Group, Inc. Quote

Key Factors & Estimates for TROW in Q1

In the January-March quarter, the S&P 500 Index fell 2.7%, indicating choppy market performance. The fixed-income market saw positive flow trends, with solid returns across funds. However, equity markets lagged the fixed-income performance. As a result, asset managers’ performances for the March-end quarter are likely to have benefited from strong fixed-income returns. However, weaker equity markets are likely to have partially offset these gains.

Amid the challenging operating environment, T. Rowe Price is likely to have continued to record net outflows in the first quarter. Per the company’s monthly metrics data, its net outflows were $8.6 billion for the quarter ended March 31, 2025.

The company’s preliminary AUM of $1.57 trillion as of March 31, 2025, decreased 2.6% from Dec. 31, 2024, due to a decline in the Equity market performance.

The Zacks Consensus Estimate for total AUM is pegged at $1.61 trillion, indicating a marginal sequential increase. Our estimate for the same is pinned at $1.69 billion.

The Zacks Consensus Estimate for investment advisory fees is pegged at $1.61 billion, suggesting a decline of 3.7% on a sequential basis. Our estimate for the same is pegged at $1.63 billion.

The consensus estimate for administrative, distribution and servicing fees of $142.5 million implies a slight decrease from the prior quarter’s actual. Our estimate for the metric is pegged at $148 million.

Coming to expenses, T. Rowe Price incurs significant expenditure to attract investment advisory clients and additional investments from existing clients. Also, the company invests substantially in upgrading technology to align with changing customer needs. Thus, overall expenses are expected to have risen in the quarter under review, impeding bottom-line growth.

Story Continues

Our estimate for operating expenses (GAAP basis) is pegged at $1.26 billion, indicating a 8.3% rise on a sequential basis.

What the Zacks Model Unveils for TROW

According to our proven model, the chances of T. Rowe Price beating the Zacks Consensus Estimate for earnings this time are low. This is because the company does not have the right combination of the two key elements, a positive Earnings ESP and Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold).

You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.

Earnings ESP: The company has an Earnings ESP of 0.00%.

Zacks Rank: T. Rowe Price currently has a Zacks Rank of 4 (Sell).

You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for first-quarter earnings of $2.09 per share has been unchanged over the past seven days. The figure indicates a year-over-year decline of 12.2%.

The consensus estimate for revenues of $1.77 billion implies 1.2% growth from the prior-year quarter’s actual.

Performance of TROW's Peers

Invesco’s IVZ first-quarter 2025 adjusted earnings of 44 cents per share surpassed the Zacks Consensus Estimate of 39 cents. Moreover, the bottom line jumped 33.3% from the prior-year quarter.

IVZ’s results primarily gained from higher adjusted net revenues. An increase in AUM balance due to decent inflows was positive, too. However, higher adjusted operating expenses were worrisome.

SEI Investments Co.’s SEIC first-quarter 2025 earnings per share of $1.17 beat the Zacks Consensus Estimate of $1.12. Moreover, the bottom line reflected a rise of 18.2% from the prior-year quarter's level.

SEIC's results were aided by higher revenues and a rise in assets under management. However, higher expenses acted as spoilsports.

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T. Rowe Price Group, Inc. (TROW):Free Stock Analysis Report

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This article originally published on Zacks Investment Research (zacks.com).

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