Principal Financial (PFG)
NASDAQ:PFG
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Principal Financial
(NASDAQ:PFG)
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Rating:73Outperform
Price Target:
$95.00
▲(3.49% Upside)
Action:ReiteratedDate: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
High quality cash generation & FCF conversion
Principal exhibits durable cash-generation quality: FCF closely tracks net income and grew in 2023–2025, providing recurring internal funding. Strong conversion supports ongoing dividends, sizable buybacks, and reinvestment without needing aggressive external financing, enhancing long-term financial flexibility.
Negative Factors
Volatile revenue and earnings seasonality
Material swings in revenue and margins reduce predictability of core earnings and complicate multi-year planning. For a financials/insurance firm, cyclical revenue undermines steady fee growth and makes capital deployment and payout targets more sensitive to market and underwriting cycles over coming quarters.
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Positive Factors
Negative Factors
High quality cash generation & FCF conversion
Principal exhibits durable cash-generation quality: FCF closely tracks net income and grew in 2023–2025, providing recurring internal funding. Strong conversion supports ongoing dividends, sizable buybacks, and reinvestment without needing aggressive external financing, enhancing long-term financial flexibility.
Read all positive factors
Principal Financial (PFG) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$19.91B
Dividend Yield3.44%
Average Volume (3M)1.64M
Price to Earnings (P/E)9.5
Beta (1Y)0.96
Revenue Growth12.33%
EPS GrowthN/A
CountryUS
Employees19,700
SectorFinancial
Sector Strength70
IndustryInsurance - Diversified
Share Statistics
EPS (TTM)2.19
Shares Outstanding216,835,140
10 Day Avg. Volume1,171,048
30 Day Avg. Volume1,644,289
Financial Highlights & Ratios
PEG Ratio-0.78
Price to Book (P/B)1.68
Price to Sales (P/S)1.27
P/FCF Ratio4.49
Enterprise Value/Market Cap0.99
Enterprise Value/Revenue1.26
Enterprise Value/Gross Profit2.79
Enterprise Value/Ebitda13.90
Forecast
1Y Price Target
$94.75Price Target Upside3.21% Upside
Rating ConsensusHold
Number of Analyst Covering8
EPS Forecast (FY)9.3
Revenue Forecast (FY)$16.98B
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 Glo...
How the Company Makes Money
PFG generates earnings primarily through fees, premiums, and investment income tied to its retirement, asset management, and insurance/benefits businesses. In Retirement and Income Solutions, it earns recurring administrative and service fees for ...
Principal Financial Earnings Call Summary
Earnings Call Date:Feb 09, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:Apr 23, 2026
Earnings Call Sentiment Positive
The call highlights strong, broad-based operational execution in 2025 with double-digit EPS growth, expanded margins, improved ROE, robust capital generation (92% free capital flow conversion) and significant asset management momentum (AUM +10%, private markets growth). Management set confident 2026 targets (EPS growth 9%-12%, ROE 15%-17%, 75%-85% free capital conversion) and plans continued capital returns. Headwinds are present but appear manageable: a negative quarterly net cash flow, divestiture-related revenue/AUM noise (including a Chilean runoff annuity), below-target growth in some specialty lines, and near-term seasonality/expense impacts. Overall, positive operational and capital metrics outweigh the limited and largely controlled challenges, supporting an upbeat outlook.Positive Updates
Strong EPS Growth
Adjusted non-GAAP EPS grew 12% for full-year 2025 (at the high end of target); reported EPS grew nearly 20%. Full-year non-GAAP operating earnings were $1.9 billion or $8.55 per diluted share.
Negative Updates
Quarterly Net Cash Flow Weakness
Net cash flow was negative $2.0 billion for the quarter (despite +$1.0 billion in private flows); reported net flows exclude $2.4 billion of dividends reinvested in mutual funds, contributing to quarter volatility.
Read all updates
Q4-2025 Updates
Positive
Negative
Strong EPS Growth
Adjusted non-GAAP EPS grew 12% for full-year 2025 (at the high end of target); reported EPS grew nearly 20%. Full-year non-GAAP operating earnings were $1.9 billion or $8.55 per diluted share.
Read all positive updates
Company Guidance
The company guided to 2026 enterprise targets of 9%–12% EPS growth (excluding significant variances), 75%–85% free capital flow conversion, and a raised ROE target of 15%–17%, and said it will target $1.5–$1.8 billion of capital deployment (including $800M–$1.1B of share repurchases) while maintaining a ~40% dividend payout policy (announced $0.80/share, up $0.01 and ~7% vs. 2025); they expect variable investment income (VII) to improve year‑over‑year but did not bake it into baseline guidance. Unit-level 2026 targets include RIS net revenue growth of 2%–5% with margins of 38%–41% (expect to be at the upper end), Investment Management adjusted revenue growth of 4%–7% with margins of 35%–39%, International Pension margins of 46%–50% (upper half expected), Specialty Benefits premium & fees growth of 5%–9% with margins of 14%–17% (upper half expected) and a loss‑ratio target of 60%–64% (2026 expected at the low end), and Life premium & fee growth of –2% to –4% with margins of 12%–16% (2026 at the low end) while the business‑owner market grows >10%. Guidance assumes normal market conditions, notes Q1 seasonality (Investment Management seasonal expenses of ~$30M–$35M), and will continue to treat deviations in VII as significant variances.Principal Financial Financial Statement Overview
Summary
Income Statement
58
Neutral
Balance Sheet
72
Positive
Cash Flow
82
Very Positive
| 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 | 33.49B | 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 | -181.80M | 300.30M | -2.59B | -1.72B | 1.92B |
Principal Financial Technical Analysis
Positive
91.80
Price Trends
91.13
Positive
89.27
Positive
83.96
Positive
Market Momentum
0.56
Negative
55.74
Neutral
72.78
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 91.8 is above the 20-day moving average (MA) of 88.78, above the 50-day MA of 91.13, and above the 200-day MA of 83.96, indicating a bullish trend. The MACD of 0.56 indicates Negative momentum. The RSI at 55.74 is Neutral, neither overbought nor oversold. The STOCH value of 72.78 is Neutral, 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 56 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 |
|---|---|---|---|---|---|---|---|
84 Outperform | $34.15B | 7.15 | 19.02% | ― | 16.68% | -28.54% | |
79 Outperform | $37.86B | 10.14 | 21.37% | 1.55% | 7.11% | 22.52% | |
73 Outperform | $19.91B | 9.49 | 10.26% | 3.44% | 12.33% | ― | |
68 Neutral | $18.00B | 11.42 | 9.92% | 3.81% | 9.73% | 1.22% | |
67 Neutral | $41.25B | 15.62 | 7.50% | 2.02% | -23.02% | 52.43% | |
65 Neutral | $11.84B | 10.92 | 11.63% | 5.77% | -6.19% | ― | |
50 Neutral | $10.53B | 15.82 | -152.32% | 2.15% | 7.70% | -155.12% |
* Financial Sector Average
PFG
Principal Financial
91.80
21.11
29.85%
AEG
Aegon
7.87
2.09
36.07%
AIG
American International Group
76.87
-2.84
-3.56%
ACGL
Arch Capital Group
95.97
3.10
3.34%
HIG
Hartford Insurance
137.23
21.50
18.58%
EQH
Equitable Holdings
37.43
-8.72
-18.89%
Principal Financial Corporate Events
Business Operations and StrategyFinancial Disclosures
Principal Financial Reports Q4 2025 Assets Under Management
Positive
Jan 22, 2026
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 &...
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.