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How T. Rowe Price’s Valuation Compares

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PE ratios

T. Rowe Price’s (TROW) NTM (next-12-month) PE ratio is 15.19x, higher than peers’ average of 10.08x. Competitors’ (XLF) NTM PE ratios are as follows:

  • Franklin Resources (BEN): 9.93x
  • Invesco (IVZ): 9.00x
  • State Street (STT): 11.32x

In the second quarter, T. Rowe Price’s investment advisory fees are expected to rise sequentially due to its total assets under management rising. In the first quarter, the company’s investment advisory fees rose 19.8% year-over-year.

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What’s ahead for the asset management industry?

The first quarter was rough for asset managers, primarily because of equity market fluctuation. In the second half of 2018, markets could be volatile, attracting fewer investors and impacting asset managers. Trade tension and the Fed’s rate hike decisions will likely be the main drivers of market uncertainty.

As a result of Donald Trump’s protectionist policies boosting US market uncertainty, investors may turn to debt products in the second half of 2018. However, higher debt demand could impact their yields as prices rise. T. Rowe Price’s LTM (last-12-month) PE ratio is 17.77x, while Franklin Resources, Invesco, and State Street have LTM PE ratios of 10.06x, 10.46x, and 14.51x, respectively.

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