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Prudential Financial (PRU) Q3 Earnings: A Surprise in Store?
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Prudential Financial, Inc. (PRU - Free Report) is set to report third-quarter 2016 results on Nov 2, after the market closes. Last quarter, the company posted a negative earnings surprise of 26.10%. Let’s see how things are shaping up for this announcement.
Factors to be Considered this Quarter
Prudential Financial is likely to display significant growth in sales and flows across its domestic and international businesses in the to-be-reported quarter. Moreover, the company is likely to report strong earnings and robust net inflows at its Asset Management business in the quarter.
Also, Prudential Financial’s Retirement segment might record improvement in results in the pension risk transfer (PRT) business owing to its leadership position and deeper penetration in the same.
However, the company is likely to report a decline in net investment income due to a low interest rate environment. In addition, the multi line insurer is likely to incur higher expenses, primarily comprising of fixed asset disposals, legal costs and employee benefit costs.
With respect to surprise trend, the company delivered negative surprises in all of the last four quarters, with an average miss of 12.57%.
Our proven model does not conclusively show that Prudential Financial is likely to beat on earnings this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. That is not the case here as you will see below.
Zacks ESP: Prudential Financial has an Earnings ESP of 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate stand at $2.50. Please check our Earnings ESP Filter that enables you to find stocks that are expected to come out with earnings surprises.
Zacks Rank: Prudential Financial holds a Zacks Rank #2.
Conversely, we caution against Sell-rated stocks (Zacks Rank #4 or 5) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Currently, the stock is trading at $84.50. We expect the release to lead to stock movement.
Stocks to Consider
Here are some companies from the finance sector that you may want to consider as these have the right combination of elements to post an earnings beat this quarter:
Ares Management, L.P. (ARES - Free Report) has an Earnings ESP of +2.63% and a Zacks Rank #2. The company is set to report third-quarter earnings on Nov 7.
AerCap Holdings N.V. (AER - Free Report) has an Earnings ESP of +7.80% and a Zacks Rank #3. The company is slated to report third-quarter earnings on Nov 8.
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Prudential Financial (PRU) Q3 Earnings: A Surprise in Store?
Prudential Financial, Inc. (PRU - Free Report) is set to report third-quarter 2016 results on Nov 2, after the market closes. Last quarter, the company posted a negative earnings surprise of 26.10%. Let’s see how things are shaping up for this announcement.
Factors to be Considered this Quarter
Prudential Financial is likely to display significant growth in sales and flows across its domestic and international businesses in the to-be-reported quarter. Moreover, the company is likely to report strong earnings and robust net inflows at its Asset Management business in the quarter.
Also, Prudential Financial’s Retirement segment might record improvement in results in the pension risk transfer (PRT) business owing to its leadership position and deeper penetration in the same.
However, the company is likely to report a decline in net investment income due to a low interest rate environment. In addition, the multi line insurer is likely to incur higher expenses, primarily comprising of fixed asset disposals, legal costs and employee benefit costs.
With respect to surprise trend, the company delivered negative surprises in all of the last four quarters, with an average miss of 12.57%.
PRUDENTIAL FINL Price and EPS Surprise
PRUDENTIAL FINL Price and EPS Surprise | PRUDENTIAL FINL Quote
Earnings Whispers
Our proven model does not conclusively show that Prudential Financial is likely to beat on earnings this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. That is not the case here as you will see below.
Zacks ESP: Prudential Financial has an Earnings ESP of 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate stand at $2.50. Please check our Earnings ESP Filter that enables you to find stocks that are expected to come out with earnings surprises.
Zacks Rank: Prudential Financial holds a Zacks Rank #2.
Conversely, we caution against Sell-rated stocks (Zacks Rank #4 or 5) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Currently, the stock is trading at $84.50. We expect the release to lead to stock movement.
Stocks to Consider
Here are some companies from the finance sector that you may want to consider as these have the right combination of elements to post an earnings beat this quarter:
Cigna Corp. (CI - Free Report) , which is slated to report third-quarter earnings on Nov 3, has an Earnings ESP of +2.62% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.
Ares Management, L.P. (ARES - Free Report) has an Earnings ESP of +2.63% and a Zacks Rank #2. The company is set to report third-quarter earnings on Nov 7.
AerCap Holdings N.V. (AER - Free Report) has an Earnings ESP of +7.80% and a Zacks Rank #3. The company is slated to report third-quarter earnings on Nov 8.
Confidential from Zacks
Beyond this Analyst Blog, would you like to see Zacks' best recommendations that are not available to the public? Our Executive VP, Steve Reitmeister, knows when key trades are about to be triggered and which of our experts has the hottest hand. Click to see them now>>