NEW YORK (TheStreet) -- T. Rowe Price Group (TROW - Get Report) stock is declining by 3.74% to $70.60 in mid-afternoon trading on Friday, after the company formally appointed William J. Stromberg as its new CEO.
Based in Baltimore, T. Rowe is a financial services company with about $725.5 billion in assets under management.
Stromberg will succeed James Kennedy as CEO, president and chair of the management company effective on January 1. Stromberg previously served as the company's head of global equity.
Kennedy, who has served as CEO for nine years, is retiring from the firm at the end of March 2016.
Additionally, the company's board authorized an increase in its stock repurchase program by 12 million shares, which brings the total repurchase program to 20.9 million shares, T. Rowe said in a statement on Thursday.
Separately, recently, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author. TheStreet Ratings has this to say about the recommendation:
We rate PRICE (T. ROWE) GROUP as a Buy with a ratings score of B. ROWE) GROUP (TROW) a BUY. This is driven by several positive factors, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, notable return on equity and expanding profit margins. We feel its strengths outweigh the fact that the company shows weak operating cash flow.
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- TROW's revenue growth has slightly outpaced the industry average of 5.6%. Since the same quarter one year prior, revenues slightly increased by 2.8%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in 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.
- 46.84% 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 26.41% significantly outperformed against the industry.
- The change in net income from the same quarter one year ago has exceeded that of the S&P 500 and greatly outperformed compared to the Capital Markets industry average. The net income has decreased by 8.7% when compared to the same quarter one year ago, dropping from $303.60 million to $277.10 million.
- PRICE (T. ROWE) GROUP's earnings per share declined by 5.3% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, PRICE (T. ROWE) GROUP increased its bottom line by earning $4.55 versus $3.89 in the prior year. For the next year, the market is expecting a contraction of 0.7% in earnings ($4.52 versus $4.55).
- You can view the full analysis from the report here: TROW