In a report released yesterday, Craig Siegenthaler from Bank of America Securities reiterated a Sell rating on T Rowe Price (TROW – Research Report), with a price target of $90.00.
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Craig Siegenthaler has given his Sell rating due to a combination of factors impacting T Rowe Price’s potential for growth. Despite T Rowe Price’s openness to incorporating private investments into their 401k plans and target date funds, significant regulatory changes are needed before this shift can be effectively realized. Currently, regulatory pressures emphasize decision-making based on fees rather than after-fee total returns, limiting the potential for these new investment strategies.
Additionally, the company’s earnings per share and price objective have been lowered, reflecting a potential total return decline of 14%. The underperformance rating is further supported by concerns over continued outflows and operational expense growth that might negatively impact long-term earnings per share. Although the new insurance partnership with Aspida and Oak Hill Advisors may lead to future opportunities, the dual migration to passive and private investments poses challenges to T Rowe Price’s traditional equity business, which significantly contributes to their management fees.
According to TipRanks, Siegenthaler is a top 100 analyst with an average return of 19.2% and a 66.87% success rate. Siegenthaler covers the Financial sector, focusing on stocks such as T Rowe Price, Charles Schwab, and AllianceBernstein.