Principal Financial (PFG) AI Stock Analysis

• Market Cap: $20.57B
• Dividend Yield: 3.44%
• Average Volume (3M): 1.70M
• Price to Earnings (P/E): 18.1
• Beta (1Y): 0.96
• Revenue Growth: 12.33%
• EPS Growth: N/A
• Country: US
• Employees: 19,700
• Sector: Financial
• Sector Strength: 70
• Industry: Insurance - Diversified
• EPS (TTM): 2.19
• Shares Outstanding: 216,835,140
• 10 Day Avg. Volume: 1,746,051
• 30 Day Avg. Volume: 1,702,665
• PEG Ratio: -0.78
• Price to Book (P/B): 1.68
• Price to Sales (P/S): 1.27
• P/FCF Ratio: 4.49
• Enterprise Value/Market Cap: 1.00
• Enterprise Value/Revenue: 1.32
• Enterprise Value/Gross Profit: 2.91
• Enterprise Value/Ebitda: 14.53
• 1Y Price Target: $94.29
• Price Target Upside: -0.59% Downside
• Rating Consensus: Hold
• Number of Analyst Covering: 7
• EPS Forecast (FY): 9.41
• Revenue Forecast (FY): $17.11B

• Rating: 73 Outperform
• Price Target: $103.00 ▲(8.59% Upside)
• Action: Reiterated Date: 02/21/26
• Date: Action: Reiterated 02/21/26

Overall score is driven by strong cash generation and balance-sheet resilience, reinforced by a confident earnings-call outlook (EPS/ROE targets and continued capital returns). This is tempered by volatile revenue/profitability in the income statement and a mixed near-term technical picture, while valuation and dividend yield remain supportive.

Positive Factors

Free cash flow conversion

Consistently high free cash flow conversion and FCF tracking net income indicate strong earnings quality and durable internal funding. This supports sustained dividends, buybacks, and reinvestment without relying on external funding, preserving long-term financial flexibility and capital deployment optionality.

Asset management scale and momentum

Large, growing AUM and strong gross sales diversify fee streams and create scale advantages in distribution and product development. Growth in private markets expands higher-margin, sticky fee sources, reducing reliance on cyclical market fees and supporting durable revenue generation over the medium term.

Capital returns with balance-sheet resilience

The combination of meaningful capital returns and a reasonable leverage profile (debt/equity roughly 0.26–0.41) signals disciplined capital allocation. Management can return cash while maintaining solvency and reinvestment capacity, aligning shareholder value creation with balance-sheet stability.

Negative Factors

Revenue and profitability volatility

Material swings in revenue and margins reduce predictability of core earnings power and complicate multi-year planning. Cyclical or lumpy income undermines stable ROE improvement and makes capital targets harder to sustain, increasing execution risk for long-term targets.

Divestitures and runoff annuity headwinds

Asset sales and the Chile runoff create persistent near-term AUM and fee headwinds until capital is redeployed. This structurally reduces fee income and can depress management-fee rates during transition, requiring efficient redeployment to avoid longer-lasting revenue shortfalls.

Life insurance margin pressure

Sub-target life margins reflect adverse underwriting or claims trends that erode segment profitability and cash generation. If persistent, this reduces overall earnings resilience and requires pricing, product or risk-management fixes to restore durable margin levels.

Principal Financial Business Overview & Revenue Model

Company Description

Principal Financial Group, Inc. provides retirement, asset management, and insurance products and services to businesses, individuals, and institutional clients worldwide. The company operates through Retirement and Income Solutions, Principal Global Investors, Principal International, and U.S. Insurance Solutions segments. The Retirement and Income Solutions segment provides a portfolio of asset accumulation products and services for retirement savings and income. It offers products and services for defined contribution plans, including 401(k) and 403(b) plans, defined benefit pension plans, nonqualified executive benefit plans, employee stock ownership plans, equity compensation, and pension risk transfer services; individual retirement accounts; investment only products; and mutual funds, individual variable annuities, and bank products. The Principal Global Investors segment provides equity, fixed income, real estate, and other alternative investments, as well as asset allocation, stable value management, and other structured investment strategies. The Principal International segment offers pension accumulation products and services, mutual funds, asset management, income annuities, and life insurance accumulation products, as well as voluntary savings plans in Brazil, Chile, Mexico, China, Hong Kong Special Administrative Region, India, and Southeast Asia. The U.S. Insurance Solutions segment provides specialty benefits, such as group dental and vision insurance, group life insurance, and group and individual disability insurance, as well as administers group dental, disability, and vision benefits; and individual life insurance products comprising universal, variable universal, indexed universal, and term life insurance products in the United States. It also offers insurance solutions for small and medium-sized businesses and their owners, as well as executives. Principal Financial Group, Inc. was founded in 1879 and is based in Des Moines, Iowa.

How the Company Makes Money

Principal Financial generates revenue through multiple key streams, primarily from fees and commissions associated with its investment management and insurance products. The Retirement and Income Solutions segment earns fees from managing retirement plans and providing annuities. Principal Global Investors contributes revenue through asset management fees based on the performance and size of investment portfolios managed for institutional and retail clients. The insurance segment generates income through premiums received from life and health insurance policies. Additionally, PFG benefits from strategic partnerships with other financial institutions and organizations, enhancing its distribution capabilities and expanding its client reach, which further contributes to its overall earnings.

Principal Financial Financial Statement Overview

Summary

Strong and consistent cash generation (high free cash flow quality and growth) and a stable, reasonable leverage profile support a solid fundamental base. The key offset is meaningful income-statement volatility (revenue and profitability swings), which reduces predictability versus top-tier peers.

Income Statement

Revenue has been volatile, with declines in 2023 and a sharp contraction in 2025, despite a rebound in 2024. Profitability is mixed: net margin improved meaningfully from 2023 to 2024, but softened again in 2025, and results look less consistent given the large swings in operating profit and margins versus the 2022 peak. Overall, earnings power appears cyclical rather than steadily compounding, which limits the score despite periods of strong profitability.

Balance Sheet

Leverage looks reasonable and stable for the period, with debt-to-equity generally in the ~0.26–0.41 range and modest improvement versus the higher 2022 level. Equity is sizable and has grown from 2022 through 2025, supporting balance-sheet resilience. Return on equity is volatile (very high in 2022, much lower in 2023, and improved in 2024 before easing in 2025), suggesting profitability variability rather than balance-sheet stress.

Cash Flow

Cash generation is a clear strength: operating cash flow and free cash flow are consistently strong across the period, and free cash flow closely tracks net income (roughly ~0.96–0.99x), indicating solid earnings quality. Free cash flow growth is positive in 2023–2025 and particularly strong in 2025, even as reported revenue declined, which supports flexibility for capital returns and reinvestment. A minor caution is that the provided operating cash flow coverage figure is inconsistent/near-zero in several years, limiting interpretability of that specific data point.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	15.63B	16.13B	13.67B	17.54B	14.43B
Gross Profit	7.06B	7.35B	5.90B	11.04B	7.08B
EBITDA	1.67B	2.15B	1.01B	6.28B	2.19B
Net Income	1.19B	1.57B	623.20M	4.76B	1.58B
Balance Sheet
Total Assets	341.38B	313.66B	305.05B	303.00B	304.66B
Cash, Cash Equivalents and Short-Term Investments	4.43B	29.94B	70.38B	67.74B	80.49B
Total Debt	4.20B	4.11B	3.99B	4.08B	4.36B
Total Liabilities	328.99B	302.19B	293.84B	292.70B	288.20B
Stockholders Equity	11.88B	11.09B	10.92B	10.00B	16.07B
Cash Flow
Free Cash Flow	4.44B	4.53B	3.69B	3.06B	3.09B
Operating Cash Flow	4.54B	4.60B	3.79B	3.17B	3.22B
Investing Cash Flow	-4.14B	-5.40B	-1.35B	1.06B	-5.66B
Financing Cash Flow	-174.20M	300.30M	-2.59B	-1.72B	1.92B

Principal Financial Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 94.85
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For PFG, the sentiment is Positive. The current price of 94.85 is above the 20-day moving average (MA) of 93.97, above the 50-day MA of 91.66, and above the 200-day MA of 82.39, indicating a bullish trend. The MACD of 0.55 indicates Positive momentum. The RSI at 55.42 is Neutral, neither overbought nor oversold. The STOCH value of 68.21 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for PFG.

Principal Financial Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ACGL	83 Outperform	$35.97B	8.55	19.54%	―	16.68%	-28.54%
HIG	79 Outperform	$38.77B	10.55	21.66%	1.55%	7.11%	22.52%
PFG	73 Outperform	$20.57B	18.06	10.32%	3.44%	12.33%	―
Sector *	68 Neutral	$18.00B	11.42	9.92%	3.81%	9.73%	1.22%
AEG	67 Neutral	$11.13B	8.12	14.42%	5.77%	-6.19%	―
AIG	67 Neutral	$42.84B	14.71	7.40%	2.02%	-23.02%	52.43%
EQH	46 Neutral	$11.78B	-8.52	-182.66%	2.15%	7.70%	-155.12%

Principal Financial Corporate Events

Principal Financial Reports Q4 2025 Assets Under Management

As of December 31, 2025, Principal Financial Group reported total assets under management of $781.0 billion, with $593.9 billion managed by Principal Asset Management – Investment Management and $153.9 billion by Principal Asset Management – International Pension, including $13.0 billion from operations disposed in the fourth quarter of 2025. For the quarter ended December 31, 2025, excluding the disposed operations, foreign currency translation, market performance, and other non–net cash flow items contributed an estimated 1.5% positive impact on beginning-period AUM, underscoring how the firm’s exposure to small- and mid-cap and international equity products, high-yield and preferred fixed income securities, and emerging-market exchange rate movements can materially influence its asset base during periods of market dislocation and return dispersion.

The most recent analyst rating on (PFG) stock is a Hold with a $89.00 price target. To see the full list of analyst forecasts on Principal Financial stock, see the PFG Stock Forecast page.