Prudential Financial (PRU) AI Stock Analysis

• Market Cap: $36.37B
• Dividend Yield: 5.21%
• Average Volume (3M): 1.58M
• Price to Earnings (P/E): 22.8
• Beta (1Y): 0.91
• Revenue Growth: -1.80%
• EPS Growth: -42.18%
• Country: US
• Employees: 37,936
• Sector: Financial
• Sector Strength: 70
• Industry: Insurance - Life
• EPS (TTM): 3.58
• Shares Outstanding: 352,000,000
• 10 Day Avg. Volume: 1,792,650
• 30 Day Avg. Volume: 1,582,421
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 1.94
• Enterprise Value/Revenue: 1.19
• Enterprise Value/Gross Profit: 4.46
• Enterprise Value/Ebitda: 29.47
• 1Y Price Target: $117.00
• Price Target Upside: 12.06% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 12

• Rating: 69 Neutral
• Price Target: $115.00 ▲(10.14% Upside)

Prudential Financial's overall stock score reflects a stable financial foundation with strong cash flow management and a solid balance sheet. The earnings call provided a balanced view of achievements and challenges, supporting a positive outlook. Valuation metrics are favorable, with an attractive dividend yield. Technical analysis indicates limited momentum, suggesting a period of consolidation.

Positive Factors

Cash Flow Management

Robust cash flow management underscores Prudential's ability to generate cash effectively, supporting financial stability and strategic investments.

International Business Growth

Growth in international markets, particularly in Japan, enhances Prudential's global footprint and diversifies revenue streams, contributing to long-term resilience.

Group Insurance Performance

Strong growth in group insurance sales reflects successful strategic initiatives, reinforcing Prudential's competitive position in the insurance market.

Negative Factors

Revenue Growth Challenges

Declining revenue growth suggests challenges in maintaining top-line expansion, which could impact long-term profitability and market competitiveness.

Profitability Margins

Low net profit margins indicate limited profitability, which may constrain Prudential's ability to reinvest in growth opportunities and improve shareholder returns.

Investment Income Shortfall

Shortfalls in investment income, particularly from private equity and real estate, could pressure earnings and affect Prudential's financial performance over time.

Prudential Financial Business Overview & Revenue Model

Company Description

Prudential 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 Money

Prudential 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 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

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

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

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.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	59.46B	70.64B	54.27B	56.96B	71.15B	57.03B
Gross Profit	15.83B	17.49B	17.55B	11.86B	28.28B	15.21B
EBITDA	2.40B	3.59B	3.00B	-1.77B	11.05B	132.00M
Net Income	1.63B	2.73B	2.49B	-1.65B	8.87B	-374.00M
Balance Sheet
Total Assets	758.95B	735.59B	721.12B	689.92B	937.58B	940.72B
Cash, Cash Equivalents and Short-Term Investments	23.01B	66.39B	19.42B	324.97B	391.93B	434.41B
Total Debt	20.02B	21.57B	20.87B	21.06B	19.62B	20.95B
Total Liabilities	725.84B	705.46B	691.34B	672.71B	874.97B	872.51B
Stockholders Equity	30.58B	27.87B	27.82B	16.25B	61.88B	67.42B
Cash Flow
Free Cash Flow	2.08B	8.50B	6.51B	5.16B	10.55B	8.28B
Operating Cash Flow	2.08B	8.50B	6.51B	5.16B	9.81B	8.37B
Investing Cash Flow	-24.29B	-28.59B	-12.12B	-7.64B	-5.34B	-16.21B
Financing Cash Flow	21.50B	19.39B	7.74B	4.93B	-3.01B	4.88B

Prudential Financial Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 104.41
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: 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 104.41 is below the 20-day moving average (MA) of 105.44, below the 50-day MA of 104.51, and below the 200-day MA of 106.32, indicating a bearish trend. The MACD of -0.78 indicates Positive momentum. The RSI at 40.87 is Neutral, neither overbought nor oversold. The STOCH value of 23.91 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for PRU.

Prudential Financial Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
GL	77 Outperform	11.61B	11.45	19.66%	0.71%	4.02%	13.01%
UNM	73 Outperform	13.09B	9.19	13.42%	2.24%	1.69%	22.65%
MET	73 Outperform	53.63B	13.67	15.48%	2.77%	6.17%	59.22%
AFL	71 Outperform	58.46B	24.71	8.96%	2.05%	-17.57%	-53.18%
PRU	69 Neutral	$36.37B	22.82	5.57%	5.21%	-1.80%	-42.18%
PUK	68 Neutral	35.24B	10.71	13.06%	1.74%	42.45%	304.26%
Sector *	68 Neutral	$18.00B	11.42	9.92%	3.81%	9.73%	1.22%