J.P. Morgan Reiterates Overweight on T. Rowe Price (TROW)

J.P. Morgan is out with a research report this morning, where it reiterates its Overweight rating on T. Rowe Price Group Inc. TROW; it has a $55.00 price target on the stock. The JPM analysts said, “T Rowe Price reported 2Q10 EPS of $0.59, below our estimate of $0.61. This was attributable to two factors: a lower than expected fee rate in other portfolios and a $0.01 reduction in EPS due to accounting treatment related to restricted shares. Overall most other aspects of the quarter were strong, with $5.1 bn of net inflows in a tough market and good expense controls.” They added, “While $5.1 bn of net inflows reflected a drop from the $10.3 bn seen in 1Q10, we think the results were strong given the market environment, especially when compared to other asset managers that have already reported. We are currently expecting a slight uptick in sales for 3Q10, though we note that July has gotten off to a weak start for the asset management sector.” The JPM analysts further noted, “T Rowe’s fund performance remains among the best in asset management. Among T Rowe's largest funds, most rank within the top two quintiles on a Lipper basis over the past 1, 3, and 5 years. We lower our 2011 estimate due to a slightly lower than previously modeled fee rate. We also push back our estimate for money market fee waiver relief to 4Q11 from 1Q11. We continue to recommend T Rowe as a leading asset gatherer and as a best-in-class money manager. Our December 2010 price target remains $55.00.”