Analyst Note| Greggory Warren |
There was little in wide-moat-rated T. Rowe Price's fourth-quarter results that would alter our long-term view of the firm. We expect to leave our $120 per share fair value estimate in place. The fourth quarter closed out a horrible year for the asset manager, with the firm losing nearly 25% of its assets under management, or AUM, to a combination of market losses ($351.4 billion) and outflows ($61.7 billion) during 2022. While most of the decline in managed assets last year came from market losses—with T. Rowe Price's growth equity-heavy platform being hit hard by the decline in technology and other growth stocks—the firm's organic AUM growth rate of negative 3.7% last year was troubling for a company that has rarely had outflows historically. That said, T. Rowe Price's overall organic AUM growth rate last year was slightly better than the negative 4.3% rate seen for actively managed equity funds during 2022 (based on data provided by Morningstar Direct).