T. Rowe Price Group misses earnings and revenue expectations in Q2

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The miss was due in part to lower-than-expected performance from the company’s equity and bond portfolios. T. Rowe Price attributed the weak performance to the “unprecedented market conditions” in the second quarter. Despite the miss, T. Rowe Price’s ($NASDAQ:TROW) shares were up slightly in pre-market trading on the news. It remains to be seen how the market reacts to the earnings report in the coming days and weeks, but the long-term effect on T. Rowe Price’s market share and earnings is uncertain.

Market Reaction

The company’s stock opened at $119.8 on Thursday and closed at $120.8, up by 0.3% from its last closing price of 120.4.

VI Analysis

The intrinsic value of T. ROWE PRICE GROUP shares is around $172.5, calculated by VI Line. The company’s fundamentals reflect its long term potential. The stock is currently traded at $120.8, which is undervalued by 30%.

Summary

The stock was down about 0.3% in early trading on the news. TROW attributed the miss to outflows from its U.S. equity funds, as well as lower performance fees. Despite the miss, TROW CEO William Stromberg said that the company is “well-positioned for the future,” citing its strong lineup of investment products and its “disciplined” approach to investing.