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Prudential Financial (PRU)
NYSE:PRU
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Prudential Financial
(NYSE:PRU)61Neutral
Positive Factors
Earnings Outlook
PRU's outlook was generally in line with expectations, with implied 2025 EPS above consensus.
Growth Strategy
PRU is targeting earnings growth of low double-digits for PGIM and mid single-digits for US Businesses.
Negative Factors
Regulatory Impact
Concerns exist around the impact of ESR adoption in Japan and PRU's mixed history with capital deployment.
Prudential Financial (PRU) vs. S&P 500 (SPY)
Market Cap
$40.75B
Dividend Yield4.63%
Average Volume (3M)1.83M
Price to Earnings (P/E)15.3
Beta (1Y)0.97
Revenue Growth34.25%
EPS Growth11.22%
CountryUS
Employees38,196
SectorFinancial
Sector Strength93
IndustryInsurance
Share Statistics
EPS (TTM)7.48
Shares Outstanding354,000,000
10 Day Avg. Volume1,740,266
30 Day Avg. Volume1,826,908
Financial Highlights & Ratios
PEG Ratio1.37
Price to Book (P/B)N/A
Price to Sales (P/S)0.58
Price to Cash Flow (P/CF)4.40
P/FCF Ratio2.30
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$126.45Price Target Upside15.38% Upside
Rating ConsensusHold
Number of Analyst Covering11
Prudential Financial Business Overview & Revenue Model
Company DescriptionPrudential Financial, Inc. is one of the world’s leading providers of financial services. The company offers an array of financial products and services including life insurance, retirement-related services, annuities, mutual funds, investment management and real estate services.
How the Company Makes MoneyPrudential Financial generates revenue primarily through its insurance and investment products. The company earns money from premiums paid by policyholders for life insurance and annuity products, which provide financial protection and income solutions. In addition, Prudential manages a substantial portfolio of investments, generating income through asset management fees from mutual funds and institutional accounts. The company's global presence allows it to tap into diverse markets, with significant contributions from its international insurance operations. Prudential also benefits from strategic partnerships and joint ventures that enhance its distribution capabilities and expand its product offerings, enabling it to reach a broader customer base and drive revenue growth.
Prudential Financial Financial Statement Overview
Summary
Prudential Financial shows a mixed financial performance. The income statement reflects solid revenue growth, but the balance sheet's negative equity and high leverage are concerning. The cash flow statement is strong, highlighting good cash generation, but potential volatility in cash management could pose risks. The company should focus on addressing equity and leverage issues to enhance financial stability.Income Statement
Prudential Financial demonstrates moderate revenue growth with a significant increase from 2023 to 2024. However, net profit margins are low, indicating potential cost management issues. The company's EBIT margin remains strong, showcasing operational efficiency, but the absence of EBITDA data for 2024 limits a comprehensive profitability analysis.60
Neutral
Balance Sheet
The balance sheet reflects a concerning negative stockholders' equity in 2024, indicating potential financial instability. The debt-to-equity ratio cannot be directly calculated due to negative equity, but the significant liabilities outweighing assets suggest high leverage. This poses a risk in stability despite past periods of maintaining positive equity.45
Neutral
Cash Flow
The cash flow statement shows a strong operating cash flow, which has improved significantly. The free cash flow remains consistent, and the operating cash flow to net income ratio suggests robust cash generation relative to earnings. However, fluctuations in investing and financing cash flows indicate potential volatility in cash management.70
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 70.41B | 53.98B | 54.58B | 71.18B | 57.09B | Gross Profit |
| 70.41B | 0.00 | 0.00 | 0.00 | 0.00 | EBIT |
| 0.00 | 41.06B | 42.02B | 57.58B | 43.19B | EBITDA |
| 0.00 | 40.99B | 42.13B | 57.78B | 43.64B | Net Income Common Stockholders |
| 2.73B | 2.49B | -1.65B | 8.87B | -374.00M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 8.28B | 19.42B | 324.97B | 391.93B | 434.41B | Total Assets |
| 735.59B | 721.12B | 689.92B | 937.58B | 940.72B | Total Debt |
| 960.00M | 20.87B | 21.06B | 19.62B | 20.95B | Net Debt |
| -6.85B | 1.46B | 3.81B | 6.73B | 7.25B | Total Liabilities |
| 705.46B | 691.34B | 672.71B | 874.97B | 872.51B | Stockholders Equity |
| 27.87B | 27.82B | 16.25B | 61.88B | 67.42B |
| Cash Flow | Free Cash Flow | |||
| 8.50B | 6.51B | 5.16B | 10.55B | 8.28B | Operating Cash Flow |
| 8.50B | 6.51B | 5.16B | 9.81B | 8.37B | Investing Cash Flow |
| -28.59B | -12.12B | -7.64B | -5.34B | -16.21B | Financing Cash Flow |
| 19.39B | 7.74B | 4.93B | -3.01B | 4.88B |
Prudential Financial Technical Analysis
Negative
109.59
Price Trends
114.96
Negative
118.74
Negative
116.68
Negative
Market Momentum
-1.05
Negative
39.89
Neutral
57.74
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For PRU, the sentiment is Negative. The current price of 109.59 is below the 20-day moving average (MA) of 111.63, below the 50-day MA of 114.96, and below the 200-day MA of 116.68, indicating a bearish trend. The MACD of -1.05 indicates Negative momentum. The RSI at 39.89 is Neutral, neither overbought nor oversold. The STOCH value of 57.74 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for PRU.
Prudential Financial Risk Analysis
Prudential Financial disclosed 15 risk factors in its most recent earnings report. Prudential 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
Prudential Financial Peers Comparison
Overall Rating
UnderperformOutperform
Sector (64)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
75 Outperform | $14.55B | 8.70 | 16.23% | 2.00% | 4.03% | 45.42% | |
72 Outperform | $20.08B | 13.34 | 14.17% | 3.21% | 18.02% | 171.70% | |
71 Outperform | $49.21B | 16.38 | -3.30% | 1.88% | -28.56% | 1.14% | |
67 Neutral | $6.65B | 2.12 | 39.61% | 4.75% | 47.95% | ― | |
65 Neutral | $58.71B | 14.50 | 16.13% | 2.54% | 6.10% | 225.22% | |
64 Neutral | $14.34B | 10.61 | 9.28% | 4.07% | 18.04% | -9.54% | |
61 Neutral | $40.75B | 15.35 | 9.78% | 4.63% | 34.25% | 11.22% |
* Financial Sector Average
Performance Comparison
PRU
Prudential Financial
109.59
4.75
4.53%
AIG
American International Group
79.85
6.57
8.97%
LNC
Lincoln National
35.88
10.59
41.87%
MET
Metlife
81.56
12.56
18.20%
PFG
Principal Financial
85.62
7.64
9.80%
UNM
Unum Group
77.91
28.67
58.23%
Prudential Financial Earnings Call Summary
Earnings Call Date: Feb 4, 2025 | % Change Since: -5.95% | Next Earnings Date: May 6, 2025
Earnings Call Sentiment Neutral
Prudential demonstrated strong sales across various sectors, particularly in retirement strategies and international markets, and maintained a robust financial position. However, the company faced challenges with lower than expected earnings due to underwriting issues and a GAAP net loss driven by investment portfolio losses.Highlights
Leadership Transition and Recognition
Andy Sullivan was appointed as the next CEO effective March 31st, with Caroline Feeney overseeing global retirement and insurance businesses. Prudential was recognized as the number one company among life and health insurance peers for 2024 on Fortune's List of the World's Most Admired Companies.
Record Sales in Retirement Strategies
Retirement strategies generated strong sales at $50 billion in 2024 across its institutional and individual lines of business, contributing to $36 billion of sales for the year, up 27% from the prior year.
PGIM Performance and Growth
PGIM's assets under management increased by 6% to $1.4 trillion from year-end 2023, driven by market appreciation, net flows, and strong investment performance. Total net flows for the full year 2024 were $38 billion.
Strong Financial Position and Capital Deployment
Prudential maintained a AA rating, held over $4 billion in highly liquid assets, and returned nearly $3 billion to shareholders in 2024. The board authorized share repurchases of up to $1 billion in 2025 and increased the common stock dividend for the 17th consecutive year.
International Business Growth
Sales in international businesses for 2024 were up 6% compared to the prior year, with a 14% increase in sales in Japan and a 12% increase in emerging markets, driven by growth in Brazil.
Lowlights
Lower Than Expected Earnings
Earnings for the fourth quarter were lower than anticipated due to adverse underwriting experience primarily driven by an elevated level of large individual life claims.
GAAP Net Loss
Prudential reported a GAAP net loss for the quarter of $57 million, largely due to interest rate-driven realized losses on the investment portfolio and some modest repositioning of the investment portfolio.
Underwriting Challenges
U.S. businesses reflected higher expenses, less favorable underwriting results driven by mortality experience, and lower net fee income. International businesses faced less favorable underwriting results, particularly due to elevated U.S. dollar product surrenders.
Investment Expenses and Market Sensitivity
Higher expenses were noted to support business growth, impacting the overall financial performance and contributing to variability in results.
Company Guidance
During the Prudential Financial, Inc. earnings call, the company provided detailed guidance for its fiscal year 2024, highlighting significant progress in becoming a higher growth, more capital-efficient company. They reported a full-year adjusted operating income of $5.9 billion, equating to $12.62 per share, reflecting a 6% increase from 2023. Despite a GAAP net loss of $57 million for the fourth quarter, primarily due to interest rate-driven realized losses, they maintained a robust capital position with a AA rating and over $4 billion in highly liquid assets. The company returned nearly $3 billion to shareholders in 2024 and authorized up to $1 billion in share repurchases for 2025. Prudential aims for a 5% to 8% annual core earnings per share growth through 2027, supported by strategic investments in high-growth markets and a disciplined capital deployment approach. The company also achieved a 13.1% adjusted operating return on equity in 2024, up 70 basis points from the previous year.Prudential Financial Corporate Events
Executive/Board ChangesShareholder Meetings
Prudential Financial Announces Leadership Changes in 2025
Neutral
Feb 21, 2025
Douglas A. Scovanner will not seek reelection to Prudential Financial’s Board of Directors at the shareholder meeting on May 13, 2025, after serving for over 11 years, departing for personal reasons without any disagreements with the company. Additionally, Robert Boyle has been appointed as Senior Vice President, Controller, and Principal Accounting Officer effective April 7, 2025, succeeding Robert Axel, with a new compensation package reflecting his elevated role.
Executive/Board ChangesBusiness Operations and Strategy
Prudential Financial Unveils 2025 Incentive Programs
Neutral
Feb 13, 2025
Prudential Financial has announced its 2025 Annual and Long-Term Incentive Programs for executive officers, applicable to awards in 2025 relating to 2024 performance. These programs form part of the company’s ongoing efforts to align executive compensation with performance goals and long-term strategic objectives, potentially impacting the company’s operational focus and stakeholder interests.
Stock BuybackDividendsBusiness Operations and StrategyFinancial Disclosures
Prudential Financial Reports Robust Growth Amidst Challenges
Positive
Feb 4, 2025
Prudential Financial reported its 2024 financial results, highlighting a net income of $2.727 billion, up from $2.488 billion in 2023, despite a net loss in the fourth quarter of $57 million. The company experienced strong sales across its retirement and insurance businesses, expanded its distribution channels, and enhanced its product mix. Prudential declared an increased quarterly dividend and announced a $1 billion stock repurchase authorization for 2025, signaling strong shareholder returns and strategic growth efforts. The company continues to position itself as a global leader by focusing on high-growth opportunities and capital efficiency while achieving substantial progress in its business operations.
Business Operations and StrategyFinancial Disclosures
Prudential Financial Reinsures $7 Billion Insurance Block
Positive
Jan 22, 2025
On January 22, 2025, Prudential Financial announced an agreement to reinsure a $7 billion block of Japanese whole life insurance products with Prismic Life Reinsurance International. This transaction is expected to modestly increase Prudential’s after-tax annual adjusted operating income and boost Prismic’s assets under management to $17 billion, enhancing its earnings and risk diversification. The deal is subject to regulatory approvals and closing conditions, with Prudential maintaining a 20% equity interest in Prismic HoldCo.
Financial Disclosures
Prudential Financial’s Strong Q4 Despite Income Revision
Neutral
Jan 15, 2025
Prudential Financial, Inc. disclosed preliminary financial results for the quarter ended December 31, 2024, indicating that its alternative investment income exceeded near-term expectations by $10 to $30 million. The company also made voluntary revisions to its historical adjusted operating income for previous quarters due to an immaterial error, resulting in a decrease in after-tax adjusted operating income by $115 million for the nine months ended September 30, 2024. These revisions did not affect the company’s GAAP net income or cash flows, maintaining its financial stability.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
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.