T. Rowe Price to Limit Expense Growth, Expand ETF Range, and Retirement Leadership Through 2027

T. Rowe Price plans to limit expense growth to low single digits through 2027 while expanding its ETF range and retirement leadership. The company is growing its ETF business, leveraging partnerships, and expanding its leadership in retirement, with CEO Robert W. Sharps highlighting a "broad momentum for the long term."

T. Rowe Price Group Inc. (TROW) reported its Q2 2025 earnings, showcasing a resilient performance despite a challenging market environment. The company's adjusted diluted earnings per share (EPS) of $2.24 exceeded analyst forecasts of $2.13, marking a 5.16% beat [1]. However, revenue fell short of expectations, coming in at $1.72 billion compared to the anticipated $1.73 billion, with a 0.58% miss. The company's stock experienced a 0.54% increase in premarket trading, reflecting a mixed investor sentiment towards the earnings results [1].

Key Takeaways
- EPS Beat: T. Rowe Price's EPS exceeded expectations by 5.16%.
- Revenue Shortfall: Revenue was slightly below forecasts, with a 0.58% miss.
- Stock Performance: The stock saw a modest rise in premarket trading, reaching $102, after a prior decline of 2.36%.
- Financial Fundamentals: The company maintains a robust current ratio of 3.89 and a healthy dividend yield of 5.01% [1].

Market Reaction
Following the earnings release, T. Rowe Price's stock rose by 0.54% in premarket trading, reaching $102. This movement comes after a previous decline of 2.36%, which placed the stock within its 52-week range of $77.85 to $125.81. The modest premarket gain suggests cautious optimism among investors, balancing the EPS beat against revenue shortfalls [1].

Outlook & Guidance
Looking ahead, T. Rowe Price expects continued net outflows in the second half of 2025, albeit at a potentially reduced pace compared to the first half. The company remains focused on expanding its ETF, retirement, and alternative investment capabilities, while exploring private market alternatives in the retirement sector [1].

CEO Robert W. Sharps expressed confidence in the company's strategic positioning, stating, "We are confident that we are positioned to take advantage of the opportunities ahead." He also highlighted the role of AI in driving productivity and cost savings, emphasizing its potential impact on investment research [1].

The company anticipates limiting expense growth to low single digits through 2027, while expanding its ETF range and retirement leadership. CEO Sharps highlighted a "broad momentum for the long term" in growing the ETF business, leveraging partnerships, and expanding leadership in retirement [1].

References:
[1] https://www.investing.com/news/transcripts/earnings-call-transcript-t-rowe-price-q2-2025-beats-eps-forecast-stock-fluctuates-93CH-4166070