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Prudential Financial (PRU)
NYSE:PRU
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Prudential Financial (PRU) AI Stock Analysis

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PRU

Prudential Financial

(NYSE:PRU)

Rating:71Outperform
Price Target:
$118.00
â–²(8.42% Upside)
Prudential Financial's overall stock score reflects a stable financial position with strong cash flow management and a solid balance sheet. Technical indicators suggest positive momentum, while valuation metrics indicate fair value with an attractive dividend yield. The recent earnings call provided a balanced view of achievements and challenges, contributing to a moderate score.
Positive Factors
Financial Performance
PGIM delivered total net flows of $4.3bn, which compared favorably with our forecast of $1.4bn.
Growth Opportunities
Management highlighted the continuing de-risking process and growth opportunities at Prudential.
Market Position
Prudential finished with the top market share for the quarter for sales in Longevity and Structured Settlement sales.
Negative Factors
Price Objective
Price objective falls to $101, previously $106, indicating a modest decline in forward EPS forecasts.
Sales Performance
Net flows in Retirement of $409mn missed our forecast of $2.16bn largely due to weaker sales compared to recent quarters.

Prudential Financial (PRU) vs. SPDR S&P 500 ETF (SPY)

Prudential Financial Business Overview & Revenue Model

Company DescriptionPrudential Financial, Inc., together with its subsidiaries, provides insurance, investment management, and other financial products and services in the United States and internationally. It operates through eight segments: PGIM, Retirement, Group Insurance, Individual Annuities, Individual Life, Assurance IQ, International Businesses, and Closed Block. The company offers investment management services and solutions related to public fixed income, public equity, real estate debt and equity, private credit and other alternatives, and multi-asset class strategies to institutional and retail clients, as well as its general account. It also provides a range of retirement investment, and income products and services to retirement plan sponsors in the public, private, and not-for-profit sectors; and group life, long-term and short-term group disability, and group corporate-, bank-, and trust-owned life insurance in the United States, primarily to institutional clients for use in connection with employee and membership benefits plans, as well as sells accidental death and dismemberment, and other supplemental health solutions; and provides plan administration services in connection with its insurance coverages. In addition, the company develops and distributes individual variable and fixed annuity products, principally to the mass affluent and affluent markets; and individual variable, term, and universal life insurance products to the mass middle, mass affluent, and affluent markets in the United States. Further, it provides third-party life, health, Medicare, property and casualty, and term life products to retail shoppers through its digital and independent agent channels. The company offers its products and services to individual and institutional customers through its proprietary and third-party distribution networks. Prudential Financial, Inc. was founded in 1875 and is headquartered in Newark, New Jersey.
How the Company Makes MoneyPrudential Financial generates revenue through multiple key streams. Primarily, the company earns money from premiums collected from its life insurance and annuity products. This includes both traditional life insurance policies and investment-oriented products. Additionally, Prudential collects fees from the management of assets in its asset management segment, which includes mutual funds and institutional investment portfolios. The company also derives income from investment income generated from its large portfolio of fixed-income and equity investments. Significant partnerships, such as those with financial advisors and brokers, enhance Prudential's distribution channels, allowing it to reach a broader customer base and increase sales. The diverse product offerings and strong brand reputation contribute to steady revenue growth and profitability.

Prudential Financial Earnings Call Summary

Earnings Call Date:Jul 30, 2025
(Q2-2025)
|
% Change Since: |
Next Earnings Date:Nov 04, 2025
Earnings Call Sentiment Neutral
The earnings call reflected a balanced view with significant achievements in operational performance, especially in international expansion and group insurance, countered by challenges in investment income and specific segments like Individual Retirement and PGIM flows. While there is solid momentum and growth in various areas, some operational and market challenges persist.
Q2-2025 Updates
Positive Updates
Increased Pretax Adjusted Operating Income
Pretax adjusted operating income was $1.7 billion or $3.58 per share, up 9% from the prior year quarter.
Strong Return on Equity
Year-to-date return on equity was over 14%, reflecting more favorable underwriting experience and higher spread income.
Robust Longevity Risk Transfer Transactions
Institutional Retirement segment delivered $9 billion of sales, with significant Longevity Risk Transfer transactions.
International Business Growth
Sales in International Businesses were up 4% compared to the prior year quarter, driven by expansion of retirement and savings products in Japan.
PGIM Performance
PGIM delivered higher asset management fees, driven by market appreciation, positive net flows, and strong investment performance with an 8% increase in assets under management.
Successful Group Insurance Performance
Group Insurance sales were up 13% year-to-date, demonstrating strong growth and strategic initiatives to improve profitability.
Negative Updates
Alternative Investment Income Shortfall
Current quarter results included alternative investment income that was $60 million below expectations, driven by lower private equity and real estate returns.
Unfavorable Impact from Assumption Updates
The quarter faced a net unfavorable impact of approximately $50 million from the annual assumption update process.
Flat PGIM Flows
PGIM flows were relatively flat due to equity market volatility, resulting in large retail outflows.
Individual Retirement Earnings Pressure
Lower core earnings in Individual Retirement Strategies due to expected runoff of legacy variable annuity block.
Continued Surrender Activity in Japan
While there is stabilization, surrender activity in Japan continues to be a near-term headwind, partially offsetting new business growth.
Company Guidance
During the second quarter of fiscal year 2025, Prudential reported a pretax adjusted operating income of $1.7 billion, translating to $3.58 per share, representing a 9% increase from the previous year. The company's year-to-date return on equity exceeded 14%. However, the quarter faced challenges with alternative investment income falling $60 million below expectations due to lower returns from private equity and real estate, and a net unfavorable impact of approximately $50 million from the annual assumption update process. Prudential's group insurance business exhibited strength with improved earnings, while Individual Life sales saw a 10% year-over-year increase. Institutional Retirement achieved $9 billion in sales, driven by robust Longevity Risk Transfer transactions. PGIM's assets under management rose by 8% to $1.4 trillion, supported by market appreciation and strong investment performance, despite retail outflows. Internationally, Prudential experienced strong sales in Japan and Brazil, though surrender activity in Japan remains a headwind. The company is focusing on evolving its strategy, with priorities on capital deployment, consistency in execution, and cultural enhancement.

Prudential Financial Financial Statement Overview

Summary
Prudential Financial's financial performance is stable with strong cash flow management and a solid balance sheet. However, challenges in revenue growth and profitability margins are evident. The company maintains moderate leverage, providing a stable financial base.
Income Statement
60
Neutral
Prudential Financial's income statement shows mixed performance. The TTM data indicates a slight decline in revenue growth rate at -1.92%, suggesting challenges in maintaining top-line growth. Gross profit margin is moderate at 26.62%, while net profit margin is relatively low at 2.74%, indicating limited profitability. The EBIT and EBITDA margins are also modest, reflecting operational efficiency challenges. Overall, while there are areas of concern, the company maintains a stable revenue base.
Balance Sheet
70
Positive
The balance sheet reveals a stable financial position with a debt-to-equity ratio of 0.65, indicating moderate leverage. Return on equity is 5.49%, which is decent but shows room for improvement in generating returns for shareholders. The equity ratio is healthy, suggesting a solid capital structure. Prudential Financial's balance sheet reflects a stable financial foundation, though there is potential for enhancing shareholder returns.
Cash Flow
75
Positive
Cash flow analysis shows strong free cash flow growth of 168.77% in the TTM period, highlighting improved cash generation capabilities. The operating cash flow to net income ratio is 0.11, indicating that cash flow generation is aligned with reported earnings. The free cash flow to net income ratio is 1.0, demonstrating effective cash conversion. Overall, Prudential Financial exhibits robust cash flow management, supporting its financial stability.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue59.46B70.64B54.27B56.96B71.15B57.03B
Gross Profit15.83B17.49B17.55B11.86B28.28B15.21B
EBITDA2.40B3.59B3.00B-1.77B11.05B132.00M
Net Income1.63B2.73B2.49B-1.65B8.87B-374.00M
Balance Sheet
Total Assets758.95B735.59B721.12B689.92B937.58B940.72B
Cash, Cash Equivalents and Short-Term Investments23.01B66.39B19.42B324.97B391.93B434.41B
Total Debt20.02B21.57B20.87B21.06B19.62B20.95B
Total Liabilities725.84B705.46B691.34B672.71B874.97B872.51B
Stockholders Equity30.58B27.87B27.82B16.25B61.88B67.42B
Cash Flow
Free Cash Flow2.08B8.50B6.51B5.16B10.55B8.28B
Operating Cash Flow2.08B8.50B6.51B5.16B9.81B8.37B
Investing Cash Flow-24.29B-28.59B-12.12B-7.64B-5.34B-16.21B
Financing Cash Flow21.50B19.39B7.74B4.93B-3.01B4.88B

Prudential Financial Technical Analysis

Technical Analysis Sentiment
Positive
Last Price108.84
Price Trends
50DMA
104.74
Positive
100DMA
103.16
Positive
200DMA
107.66
Positive
Market Momentum
MACD
1.46
Negative
RSI
59.12
Neutral
STOCH
35.35
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For PRU, the sentiment is Positive. The current price of 108.84 is above the 20-day moving average (MA) of 106.44, above the 50-day MA of 104.74, and above the 200-day MA of 107.66, indicating a bullish trend. The MACD of 1.46 indicates Negative momentum. The RSI at 59.12 is Neutral, neither overbought nor oversold. The STOCH value of 35.35 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive 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 (68)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
78
Outperform
$11.34B11.1820.02%0.73%4.02%13.01%
77
Outperform
$53.57B13.6515.61%2.76%6.17%59.22%
71
Outperform
$37.81B23.765.57%4.92%-1.80%-42.18%
71
Outperform
$57.15B23.889.15%2.06%-17.57%-53.18%
69
Neutral
$11.93B8.3813.95%2.36%1.69%22.65%
68
Neutral
$18.05B11.7310.24%3.73%9.66%1.70%
68
Neutral
$33.50B10.2020.05%1.77%42.48%304.90%
* Financial Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
PRU
Prudential Financial
108.84
0.86
0.80%
AFL
AFLAC
108.55
1.93
1.81%
MET
Metlife
81.75
9.74
13.53%
PUK
Prudential
26.44
10.27
63.51%
GL
Globe Life
141.45
39.80
39.15%
UNM
Unum Group
73.07
20.18
38.15%

Prudential Financial Corporate Events

Business Operations and StrategyFinancial Disclosures
Prudential Financial Reports Q2 2025 Earnings Results
Neutral
Jul 30, 2025

Prudential Financial reported its second quarter 2025 results, showing a net income of $533 million, down from $1.198 billion in the same quarter last year. The company highlighted positive momentum in its global retirement and insurance businesses, with strong investment performance in PGIM. Despite a decrease in net income, Prudential achieved an increase in after-tax adjusted operating income to $1.284 billion, driven by favorable underwriting results and market appreciation. The company is undergoing strategic integration of PGIM’s multi-manager model to enhance asset management capabilities and drive growth, while continuing to focus on sustainable growth and long-term shareholder value.

Financial Disclosures
Prudential Financial Discloses Preliminary Q2 2025 Results
Neutral
Jul 15, 2025

Prudential Financial disclosed preliminary financial information for the quarter ended June 30, 2025, ahead of its scheduled earnings release on July 30, 2025. The company reported that its PGIM segment managed assets worth $1.44 trillion, while other related revenues netted approximately $50 million. However, the alternative investment income of its General Account fell short of expectations by $55 – $75 million. The company also completed its annual review of actuarial assumptions, resulting in expected one-time and ongoing impacts on adjusted operating income across various business segments, notably a $100 million aggregate impact on Individual Retirement Strategies.

Executive/Board ChangesBusiness Operations and Strategy
Prudential Financial Appoints Tom Stoddard as Director
Positive
Jun 30, 2025

On June 30, 2025, Prudential Financial, Inc. announced the election of Tom Stoddard as an independent director to its Board of Directors, effective immediately. Stoddard, who brings 35 years of experience in financial services, will serve on the Audit and Investment Committees. His extensive background includes roles at Bank of America, Athora Ltd., and Aviva plc, and he is expected to contribute significantly to Prudential’s growth strategy. The appointment is seen as a strategic move to leverage Stoddard’s deep industry knowledge and leadership experience to guide Prudential’s future development.

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.Date of analysis: Aug 19, 2025