T. Rowe Price: Rising Markets Contributed to 15% Increase in Our Fair Value Estimate

We've increased our fair value estimate for wide-moat T. Rowe Price to $115 per share from $100 to account for revised near-term expectations for assets under management, revenue, and profitability since our last update. With the U.S. equity markets rising 12% in the fourth quarter of 2023, and the credit markets also rising 7%, T. Rowe Price saw a 13% increase in its AUM during the period. This not only left the firm in a better position than we had been expecting coming into 2024, but the recovery in equity AUM should lift its overall realization rate, allowing us to raise our fair value estimate as much as we did.