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What’s T. Rowe Price’s Outlook on Emerging Markets?

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Favorable outlook

T. Rowe Price (TROW) believes that emerging markets may offer significant investment opportunities after their strong momentum in 2017. Because of improving political and economic situations in some developing countries, many global emerging markets can be looked upon for investments.

In 2017, emerging markets saw higher economic growth than developed markets. This trend is expected to continue in 2018, particularly in India, Russia, and Brazil.

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Company’s earnings, profit margins

The positive trend in emerging economies could boost earnings for companies, which are looking to improve their profit margins and lower costs. In many emerging market countries, profit margins are narrower than historical averages, indicating they have some room for recovery. Capital deployment after careful analysis is boosting cash flow, which could improve dividends.

As of March 8, 2018, T. Rowe Price had a market capitalization of $27.6 billion, whereas peers (XLF) Franklin Resources (BEN), BlackRock (BLK), and Financial Engines (FNGN) had market caps of $21.6 billion, $88.3 billion, and $2.1 billion, respectively.

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