T. Rowe Price Group, Inc.’s TROW first-quarter 2026 adjusted earnings per share (EPS) of $2.52 surpassed the Zacks Consensus Estimate of $2.37. Nevertheless, the bottom line increased 13% year over year.
Shares of the company gained 1.7% in the early trading session following the release of better-than-expected results. A full day’s trading session will depict a clearer picture.
TROW's results benefited from higher investment advisory fees and a rise in assets under management (AUM). Positive capital allocation-based income was also encouraging. However, higher expenses acted as a headwind.
The results included certain items. After considering those, net income attributable to T. Rowe Price (on a GAAP basis) was $498.2 million, which rose 1.6% from the prior-year quarter.
TROW’s Revenues Increase, Expenses Rise
Net revenues rose 5.3% year over year to $1.86 billion. Further, the top line missed the Zacks Consensus Estimate by 0.32%.
Investment advisory fees rose 5.3% year over year to $1.68 billion.
Capital allocation-based income increased to $28.1 million from a loss of $1.2 million in the prior-year quarter.
Total operating expenses increased nearly 1% year over year to $1.18 billion in the reported quarter. On an adjusted basis, operating expenses were $1.15 billion, up 1.8% year over year.
TROW’s AUM Rises, Liquidity Position Strong
As of March 31, 2026, total AUM grew 9.1% year over year to $1.71 trillion.
In the first quarter, net market depreciation and income of $52.2 billion unfavorably impacted T. Rowe Price’s AUM. Also, net cash outflows were $13.7 billion.
The company had substantial liquidity, including cash and cash equivalents of $3.73 billion as of March 31, 2026, up from $2.84 billion as of March 31, 2025. This will enable TROW to keep investing.
TROW’s Capital Distribution Activities
T. Rowe Price distributed a total of $629 million to shareholders through common stock dividends and share repurchases in the first quarter.
Our View on TROW
TROW’s solid AUM balance, broadening distribution reach and efforts to diversify business through acquisitions and product enhancements are likely to support top-line growth. However, an elevated expense base and excessive reliance on investment advisory fees are concerns. The current tough operating environment is a headwind. Nonetheless, a solid liquidity position enables sustainable capital distributions.
T. Rowe Price Group, Inc. Price, Consensus and EPS Surprise
T. Rowe Price Group, Inc. price-consensus-eps-surprise-chart | T. Rowe Price Group, Inc. Quote
Currently, TROW carries a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of T. Rowe Price’s Peers
Franklin Resources Inc. BEN reported second-quarter fiscal 2026 (ended March 31, 2026) adjusted earnings of 71 cents per share, which surpassed the Zacks Consensus Estimate of 55 cents per share. Also, the bottom line compared favorably with 47 cents reported in the year-ago quarter.
BEN’s results benefited from higher revenues. However, a slight decline in assets under management and elevated expenses remained headwinds.
Invesco’s IVZ first-quarter 2026 adjusted earnings of 57 cents per share lagged the Zacks Consensus Estimate by a penny. The bottom line increased 29.5% from the prior-year quarter.
The results primarily benefited from an increase in adjusted revenues and growth in AUM balance. An increase in adjusted expenses was a headwind for IVZ.
Radical New Technology Could Hand Investors Huge Gains
Quantum Computing is the next technological revolution, and it could be even more advanced than AI.
While some believed the technology was years away, it is already present and moving fast. Large hyperscalers, such as Microsoft, Google, Amazon, Oracle, and even Meta and Tesla, are scrambling to integrate quantum computing into their infrastructure.
Senior Stock Strategist Kevin Cook reveals 7 carefully selected stocks poised to dominate the quantum computing landscape in his report, Beyond AI: The Quantum Leap in Computing Power .
Kevin was among the early experts who recognized NVIDIA's enormous potential back in 2016. Now, he has keyed in on what could be "the next big thing" in quantum computing supremacy. Today, you have a rare chance to position your portfolio at the forefront of this opportunity.
See Top Quantum Stocks Now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Franklin Resources, Inc. (BEN): Free Stock Analysis Report
T. Rowe Price Group, Inc. (TROW): Free Stock Analysis Report
Invesco Ltd. (IVZ): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).