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Principal Financial
(NASDAQ:PFG)
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Rating:77Outperform
Price Target:
$129.00
▲(17.92% Upside)
Action:Reiterated
Date:08/01/26
PFG scores 77 primarily due to solid financial performance (strong free cash flow, improved profitability, and moderate leverage) and a positive earnings call (guidance reaffirmed, margin/ROE improvement, and robust capital return supported by excess capital). Technicals add support via a clear uptrend versus key moving averages, while valuation is reasonable with a ~2.8% yield and a 16.15 P/E. The main offset remains business variability and the notable Investment Management net outflows highlighted on the call.
Positive Factors
Strong cash generation
Consistent high operating and free cash flow provides durable internal funding for dividends, buybacks, and strategic investments. Over 2–6 months this supports capital returns and balance sheet flexibility, reducing reliance on external financing and enabling disciplined deployment through market cycles.
Negative Factors
Concentrated net outflows in active equity
Large, concentrated outflows materially reduce asset-based fees and can persist if performance metrics lag peers. Concentration raises product-level reputational risk, pressures resources to stabilize returns, and can lead to elevated client remediation costs or redemptions that weaken recurring revenue over multiple quarters.
Read all positive and negative factors
Positive Factors
Negative Factors
Strong cash generation
Consistent high operating and free cash flow provides durable internal funding for dividends, buybacks, and strategic investments. Over 2–6 months this supports capital returns and balance sheet flexibility, reducing reliance on external financing and enabling disciplined deployment through market cycles.
Read all positive factors
Principal Financial Key Performance Indicators (KPIs)
Any
Operating Revenue by Segment
Shows the revenue earned from each of Principal’s business lines (like retirement solutions, asset management, insurance), revealing which segments drive growth and recurring income. Helps you see how shifts in customer demand, fee rates, or interest-sensitive products could affect overall top-line stability and future profitability.
Shows the revenue earned from each of Principal’s business lines (like retirement solutions, asset management, insurance), revealing which segments drive growth and recurring income. Helps you see how shifts in customer demand, fee rates, or interest-sensitive products could affect overall top-line stability and future profitability.
Data provided by:
The Fly
The FlyPrincipal Financial (PFG) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$24.34B
Dividend Yield2.81%
Average Volume (3M)1.48M
Price to Earnings (P/E)16.1
Beta (1Y)0.98
Revenue Growth3.72%
EPS Growth41.16%
CountryUS
Employees19,700
SectorFinancial
Sector Strength70
IndustryAsset Management
Share Statistics
EPS (TTM)7.04
Shares Outstanding214,104,640
10 Day Avg. Volume1,605,177
30 Day Avg. Volume1,482,758
Financial Highlights & Ratios
PEG Ratio-0.77
Price to Book (P/B)1.68
Price to Sales (P/S)1.27
P/FCF Ratio4.49
Enterprise Value/Market Cap<0.01
Enterprise Value/Revenue<0.01
Enterprise Value/Gross Profit<0.01
Enterprise Value/Ebitda<0.01
Forecast
1Y Price Target
$107.60Price Target Upside-1.65% Downside
Rating ConsensusHold
Number of Analyst Covering10
EPS Forecast (FY)9.51
Revenue Forecast (FY)$16.31B
Principal Financial Business Overview & Revenue Model
Company Description
Principal Financial Group, Inc. engages in the investment management offering business. It offers financial products and services to businesses, individuals, and institutional clients. It operates its business through the following segments: Retir...
How the Company Makes Money
PFG generates revenue primarily through a mix of asset-based fees, premiums, net investment income, and spread-based earnings tied to retirement and insurance liabilities. (1) Principal Asset Management earns management and performance fees for ma...
Principal Financial Earnings Call Summary
Earnings Call Date:Jul 27, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Oct 22, 2026
Earnings Call Sentiment Positive
The call highlighted robust operating performance across multiple businesses — double-digit EPS growth, margin expansion (200 bps), improved ROE, strong underwriting in Benefits & Protection, AUM growth, and disciplined capital returns (raised dividend, large buybacks). These positives were tempered by significant Investment Management net outflows (~$11 billion) driven by an unusual market environment concentrated in a few U.S. active equity strategies, some fee-rate and performance-metric pressure, and elevated corporate investments/severance. Management maintained guidance, emphasized portfolio actions (Beam acquisition, Hong Kong transition, Chile sale) and a strong capital position, indicating confidence in navigating the near-term fund flow challenges.Positive Updates
Strong Earnings and EPS Growth
Non-GAAP operating earnings of $547 million, up 12% year-over-year; adjusted EPS of $2.50, up 16% year-over-year (excluding significant variances EPS was $2.42, up 17%). Year-to-date EPS growth of 15% noted.
Negative Updates
Large Investment Management Net Outflows
Total company net outflows of approximately $11 billion in the quarter concentrated in a small number of U.S. active equity strategies (strategies represent slightly more than 5% of firm AUM), creating short-term revenue and flow headwinds.
Read all updates
Q2-2026 Updates
Positive
Negative
Strong Earnings and EPS Growth
Non-GAAP operating earnings of $547 million, up 12% year-over-year; adjusted EPS of $2.50, up 16% year-over-year (excluding significant variances EPS was $2.42, up 17%). Year-to-date EPS growth of 15% noted.
Read all positive updates
Company Guidance
Management reiterated 2026 guidance and capital plans while highlighting strong Q2 results: they remain on track to deploy $1.5–$1.8 billion of capital for the year (YTD returns to shareholders $800M, including ~$427–$430M in Q2 with $250M buybacks), raised the common dividend to $0.84/sh payable in Q3 (+$0.02 q/q, +8% y/y) and target a ~40% payout ratio, and report over $1.6 billion of excess available capital (including $150M at the holding company, $300M in subsidiaries and ~$350M in excess of a 375% RBC target, with RBC ≈400%); financials underpinning the guidance include Q2 non‑GAAP operating earnings of $547M (+12% y/y) and EPS $2.50 (+16%) (ex‑items $529M, EPS $2.42), total company margin 32% (+200 bps) on 6% net revenue growth, non‑GAAP operating ROE ex‑items 16.4% (+120 bps) (within the 15–17% target), net income ex‑exited business $535M (+24% y/y), and managed AUM $808B (+5% q/q, +7% y/y); they expect full‑year 2026 performance fees in line with 2025, see SBD underwriting results emerging below the low end of the prior 60–64% loss‑ratio range (Q2 specialty benefits loss ratio 57.4%, specialty pretax earnings $162M; Benefits & Protection pretax $191M, +29% y/y), and noted $11B of concentrated net outflows in a few U.S. active equity strategies even as DCIO sales, roll‑ins and ETF flows remained healthy (DCIO $2B qtr / ~$8B TTM, roll‑ins $1.7B qtr / >$7B TTM, active ETF inflows $500M qtr / $2B TTM); management said they do not expect changes to their earnings, free capital flow or ROE outlook.Principal Financial Financial Statement Overview
Summary
Income Statement
74
Positive
Balance Sheet
78
Positive
Cash Flow
80
Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 15.69B | 15.63B | 16.13B | 13.67B | 17.54B | 14.43B |
| Gross Profit | 7.62B | 7.06B | 7.35B | 5.90B | 11.04B | 7.08B |
| EBITDA | 1.90B | 1.67B | 2.15B | 1.01B | 6.28B | 2.19B |
| Net Income | 1.55B | 1.19B | 1.57B | 623.20M | 4.76B | 1.58B |
Balance Sheet | ||||||
| Total Assets | 333.96B | 341.38B | 313.66B | 305.05B | 303.00B | 304.66B |
| Cash, Cash Equivalents and Short-Term Investments | 5.26B | 33.49B | 72.46B | 70.38B | 67.74B | 80.91B |
| Total Debt | 4.34B | 3.95B | 4.11B | 3.99B | 4.08B | 4.69B |
| Total Liabilities | 339.86B | 328.99B | 302.19B | 293.84B | 292.70B | 288.20B |
| Stockholders Equity | 12.14B | 11.88B | 11.09B | 10.92B | 10.00B | 16.07B |
Cash Flow | ||||||
| Free Cash Flow | 4.85B | 4.44B | 4.53B | 3.69B | 3.06B | 3.09B |
| Operating Cash Flow | 5.01B | 4.54B | 4.60B | 3.79B | 3.17B | 3.22B |
| Investing Cash Flow | -5.31B | -4.14B | -5.40B | -1.35B | 1.06B | -5.66B |
| Financing Cash Flow | 1.90B | -181.80M | 300.30M | -2.59B | -1.72B | 1.92B |
Principal Financial Technical Analysis
Positive
109.40
Price Trends
109.29
Positive
101.64
Positive
94.21
Positive
Market Momentum
1.42
Negative
62.24
Neutral
91.52
Negative
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 109.4 is below the 20-day moving average (MA) of 112.22, above the 50-day MA of 109.29, and above the 200-day MA of 94.21, indicating a bullish trend. The MACD of 1.42 indicates Negative momentum. The RSI at 62.24 is Neutral, neither overbought nor oversold. The STOCH value of 91.52 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for PFG.
Principal Financial Risk Analysis
Principal Financial disclosed 62 risk factors in its most recent earnings report. Principal Financial reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Principal Financial Peers Comparison
UnderperformOutperform
Sector (68)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
81 Outperform | $35.12B | 7.76 | 20.48% | ― | -0.21% | 31.57% | |
78 Outperform | $38.44B | 9.09 | 22.99% | 1.65% | 5.95% | 39.99% | |
77 Outperform | $24.34B | 16.15 | 13.23% | 2.92% | 3.72% | 41.16% | |
70 Outperform | $41.66B | 13.74 | 7.70% | 2.34% | -2.31% | 26.43% | |
68 Neutral | $18.00B | 11.42 | 9.92% | 3.81% | 9.73% | 1.22% | |
61 Neutral | $14.19B | 13.29 | 11.63% | 5.08% | 33.06% | 50.47% | |
56 Neutral | $13.01B | -16.96 | -219.79% | 2.31% | -19.35% | -175.55% |
* Financial Sector Average
PFG
Principal Financial
115.25
41.83
56.97%
AEG
Aegon
9.38
2.60
38.37%
AIG
American International Group
79.32
2.71
3.54%
ACGL
Arch Capital Group
99.52
10.86
12.25%
HIG
Hartford Insurance
142.05
16.67
13.30%
EQH
Equitable Holdings
48.25
-1.35
-2.72%
Principal Financial Corporate Events
Business Operations and StrategyFinancial Disclosures
Principal Financial reports strong Q2 assets under management
Positive
Jul 20, 2026
As of June 30, 2026, Principal Financial Group reported total assets under management of $808.0 billion, with $601.9 billion overseen by Principal Asset Management – Investment Management and $168.5 billion managed by Principal Asset Managem...
Business Operations and StrategyPrivate Placements and FinancingRegulatory Filings and Compliance
Principal Financial Issues New 2037 Senior Notes Offering
Positive
Jun 1, 2026
On June 1, 2026, Principal Financial Group, Inc. issued $400 million of 5.300% senior notes due 2037, fully and unconditionally guaranteed by Principal Financial Services, Inc., with the sale closing the same day under an automatic shelf registrat...
Executive/Board ChangesShareholder Meetings
Principal Financial shareholders back directors, pay and incentives
Positive
May 20, 2026
Principal Financial Group, Inc. reported the outcomes of its May 19, 2026 annual shareholders meeting, where investors elected Class I directors Jonathan S. Auerbach, Mary E. “Maliz” Beams, Jocelyn Carter-Miller, Scott M. Mills, and Cl...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.