T. Rowe Price (TROW) Stock Coverage Initiated at Goldman Sachs

NEW YORK (TheStreet) -- T. Rowe Price (TROW) stock coverage was initiated today by analysts at Goldman Sachs with a "neutral" rating and a price target of $84.

In morning trading session on Monday, shares are decreasing 0.69% to $78.67.

The action comes after the company last week closed its popular Health Sciences Fund to new investors, according to Barron's. The decision to close the fund was made to maintain the integrity of the fund's investment strategy and to protect the interests of existing shareholders, the company stated.

T. Rowe Price Group is a financial services holding company headquartered in Baltimore.

About 310,000 shares of T. Rowe Price were traded by 11:05 am today, below the company's trading volume of about 1,356,000 shares a day.

Separately, TheStreet Ratings team rates PRICE (T. ROWE) GROUP as a Buy with a ratings score of A. TheStreet Ratings Team has this to say about their recommendation:

"We rate PRICE (T. ROWE) GROUP (TROW) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, notable return on equity, growth in earnings per share, good cash flow from operations and expanding profit margins. We feel its strengths outweigh the fact that the company has had lackluster performance in the stock itself."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • TROW's revenue growth has slightly outpaced the industry average of 5.7%. Since the same quarter one year prior, revenues slightly increased by 7.6%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Capital Markets industry and the overall market, PRICE (T. ROWE) GROUP's return on equity significantly exceeds that of both the industry average and the S&P 500.
  • PRICE (T. ROWE) GROUP reported flat earnings per share in the most recent quarter. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, PRICE (T. ROWE) GROUP increased its bottom line by earning $4.55 versus $3.89 in the prior year. This year, the market expects an improvement in earnings ($4.88 versus $4.55).
  • Net operating cash flow has increased to $543.80 million or 11.64% when compared to the same quarter last year. Despite an increase in cash flow of 11.64%, PRICE (T. ROWE) GROUP is still growing at a significantly lower rate than the industry average of 189.33%.
  • 49.36% is the gross profit margin for PRICE (T. ROWE) GROUP which we consider to be strong. Regardless of TROW's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, TROW's net profit margin of 30.13% compares favorably to the industry average.
  • You can view the full analysis from the report here: TROW Ratings Report

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