Prudential (PUK) AI Stock Analysis

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Prudential

(NYSE:PUK)

72Outperform

Prudential's stock is favorably positioned with strong earnings growth and strategic initiatives, such as expansion in new markets and a significant share buyback program. Despite revenue volatility and challenges in certain markets, the company's robust balance sheet and attractive valuation metrics suggest potential for appreciation.

Prudential (PUK) vs. S&P 500 (SPY)

Market Cap

$24.89B

Dividend Yield2.23%

Average Volume (3M)1.20M

Price to Earnings (P/E)11.6

Beta (1Y)1.03

Revenue Growth-14.78%

EPS Growth34.80%

CountryUS

Employees15,412

SectorFinancial

Sector Strength78

IndustryInsurance - Life

Share Statistics

EPS (TTM)1.60

Shares Outstanding1,305,018,600

10 Day Avg. Volume1,615,238

30 Day Avg. Volume1,201,798

Financial Highlights & Ratios

PEG RatioN/A

Price to Book (P/B)N/A

Price to Sales (P/S)3.64

Price to Cash Flow (P/CF)6.30

P/FCF Ratio6.20

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price TargetN/A

Price Target UpsideN/A

Rating ConsensusModerate Buy

Number of Analyst Covering1

Prudential Business Overview & Revenue Model

Company DescriptionPrudential plc (PUK) is a leading global financial services company headquartered in London, United Kingdom. The company primarily operates in the insurance and asset management sectors, focusing on providing life insurance, health insurance, and retirement and savings solutions to its customers. Prudential's core products and services are designed to help individuals and families plan for financial security and manage their wealth effectively.

How the Company Makes MoneyPrudential makes money through a diverse revenue model centered around premium income from its insurance products, investment returns from managing policyholder funds, and fees from its asset management services. The company's key revenue streams include premiums collected from life and health insurance policies, investment income generated from its substantial asset portfolio, and management fees charged to clients for investment services. Prudential's earnings are significantly influenced by its ability to attract and retain customers, effective risk management, and strategic partnerships with financial institutions and distribution networks. Additionally, geographic diversification into high-growth markets in Asia and Africa contributes to its revenue growth and stability.

Prudential Financial Statement Overview

Summary

Prudential's financial performance shows a positive recovery with improved revenue and profit margins. The income statement indicates a significant turnaround, while the balance sheet reflects strong equity and manageable leverage. Cash flow metrics suggest adequate liquidity but highlight inefficiencies in cash management. Overall, Prudential is stabilizing financially, though past volatility is a concern.

Income Statement

Positive

Prudential's income statement shows a significant turnaround in revenue from a negative $27.6 billion in 2022 to $11.97 billion in 2023. The gross profit margin is 100% for 2023, indicating efficient cost management. Net income also improved to $1.7 billion from a loss of $1 billion in 2022, resulting in a positive net profit margin of 14.2%. However, the revenue volatility over the years suggests potential instability.

Balance Sheet

Positive

The balance sheet reflects strong equity levels with a debt-to-equity ratio of 0.27, indicating manageable leverage. Stockholders' equity increased to $17.8 billion in 2023, providing a solid equity ratio of 10.24%. The return on equity in 2023 is 9.54%, showing effective use of equity. However, the decline in total assets from 2020 to 2023 indicates a reduction in scale.

Cash Flow

Positive

Prudential's cash flow shows a recovery with a free cash flow of $788 million in 2023, up from $1.04 billion in 2022. The operating cash flow to net income ratio is 0.49, indicating less conversion of income into cash than optimal. The free cash flow to net income ratio is 0.46, suggesting room for improvement in cash generation relative to profits.

TTM	Dec 2023	Dec 2022	Dec 2021	Dec 2020	Dec 2019
Breakdown
Income Statement		Total Revenue
8.62B	11.97B	-27.59B	26.50B	36.25B	70.76B
	Gross Profit
8.62B	11.97B	-27.59B	26.50B	36.25B	70.76B
	EBIT
8.62B	2.55B	0.00	0.00	0.00	66.97B
	EBITDA
3.31B	3.06B	0.00	0.00	3.44B	0.00
	Net Income Common Stockholders
688.74M	1.70B	-1.01B	-2.04B	2.12B	591.08M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
189.30M	1.59B	1.81B	7.17B	44.05B	1.88B
	Total Assets
229.91B	174.07B	160.25B	188.23B	516.10B	342.88B
	Total Debt
3.63B	4.87B	5.08B	8.24B	9.08B	5.35B
	Net Debt
3.44B	3.28B	3.27B	1.07B	1.06B	3.47B
	Total Liabilities
222.55B	156.08B	143.35B	169.12B	493.98B	328.03B
	Stockholders Equity
7.35B	17.82B	16.73B	18.94B	20.88B	14.70B
Cash Flow		Free Cash Flow
1.34B	788.00M	1.04B	242.00M	2.72B	-4.06B
	Operating Cash Flow
1.38B	832.00M	1.08B	278.00M	2.77B	-4.01B
	Investing Cash Flow
-541.48M	-360.00M	-39.00M	-726.00M	-1.19B	-587.30M
	Financing Cash Flow
-711.35M	-1.21B	-2.52B	1.26B	-258.00M	-1.96B

Prudential Technical Analysis

Technical Analysis Sentiment

Positive

Last Price20.74

Price Trends

50DMA

19.25

Positive

100DMA

17.56

Positive

200DMA

17.27

Positive

Market Momentum

MACD

0.22

Positive

RSI

55.26

Neutral

STOCH

85.88

Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For PUK, the sentiment is Positive. The current price of 20.74 is above the 20-day moving average (MA) of 20.40, above the 50-day MA of 19.25, and above the 200-day MA of 17.27, indicating a bullish trend. The MACD of 0.22 indicates Positive momentum. The RSI at 55.26 is Neutral, neither overbought nor oversold. The STOCH value of 85.88 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for PUK.

Prudential Peers Comparison

Overall Rating

UnderperformOutperform

Sector (63)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
UNM	76 Outperform	$13.37B	8.02	17.26%	2.14%	4.03%	45.42%
AFL	74 Outperform	$58.64B	11.15	22.64%	1.93%	1.21%	24.08%
PUK	72 Outperform	$24.89B	11.61	12.82%	2.23%	-14.78%	34.80%
Sector *	63 Neutral	$12.00B	9.27	8.14%	79.61%	12.85%	-5.12%
LNC	61 Neutral	$5.17B	1.64	43.24%	5.95%	47.95%	―
MET	61 Neutral	$49.42B	12.21	15.41%	3.00%	6.10%	225.22%
PRU	61 Neutral	$35.25B	13.26	9.79%	5.28%	34.25%	11.22%

* Financial Sector Average

Performance Comparison

PUK

Prudential

20.49

2.46

13.64%

AFL

AFLAC

104.97

23.15

28.29%

LNC

Lincoln National

29.31

2.62

9.82%

MET

Metlife

70.40

0.51

0.73%

PRU

Prudential Financial

96.87

-9.75

-9.14%

UNM

Unum Group

74.17

23.76

47.13%

Prudential Earnings Call Summary

Earnings Call Date: Mar 19, 2025 | % Change Since: 5.23% | Next Earnings Date: Aug 13, 2025

Earnings Call Sentiment Positive

The earnings call highlighted significant progress in new business growth, dividend increases, and strategic initiatives like the joint venture in India. However, challenges in certain markets and regulatory impacts in Hong Kong were noted. Overall, the sentiment is positive, given the strong growth metrics and strategic achievements.

Highlights

New Business Profit Growth

New business profit grew 11% in 2024, reaching $3.1 billion, in line with guidance.

Dividend Increase and Share Buyback

Dividends per share increased by 13% and a $2 billion share buyback program was launched.

Expansion in Agency Channel

4,000 more agents were activated in the second half of 2024, with a focus on quality recruitment and tech-enabled productivity.

Health Insurance Joint Venture in India

Announced a joint venture with the HCL Group to establish a health insurance business in India.

Strong Operating Profit Growth

Adjusted operating profit after tax increased by 8% per share.

Improved New Business Margins

New business profit margins improved due to repricing and a shift towards higher-margin products.

Lowlights

Challenges in Africa and Start-up Markets

Expense overruns in Africa and other start-up markets contributed to negative operating variances.

Impact of Regulatory Changes in Hong Kong

New regulatory requirements in Hong Kong may affect business, including benefit illustration changes and potential commission caps for brokers.

Negative Operating Variances

Despite improvement, operating variances remain negative, primarily due to expense overruns.

Company Guidance

In the recent analyst and investor call, Prudential provided comprehensive guidance for 2025, emphasizing growth in several key metrics. The company expects new business profit, operating earnings per share, gross operating free surplus generation, and dividends per share to grow by over 10% this year. Notably, new business profit has already experienced a 21% compound annual growth rate since 2022 on a TEV basis. Additionally, the adjusted operating profit after tax grew by 8% per share, and dividends per share increased by 13% in 2024. Prudential is also progressing with its $2 billion share buyback program, which represents 8% of its outstanding stock, and plans to complete it by the end of 2025, ahead of schedule. The company remains focused on improving cash generation and maintaining disciplined capital allocation, with a commitment to delivering long-term value to shareholders.

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.