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Prudential (PRU) to Report Q1 Earnings: What's in Store?

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Prudential Financial, Inc. (PRU - Free Report) is slated to report first-quarter 2021 results on May 4, after market close. The company delivered an earnings surprise of 17.2% in the last reported quarter.

Factors to Consider

Higher assets under management, higher variable investment income, lower travel and entertainment expenses are likely to have aided Prudential’s first-quarter performance.

Lower expenses, business growth, and more favorable underwriting results are likely to have contributed to the performance of the International Insurance segment.

Lower level of sales is likely to have affected the Life Planner and Gibraltar Life operations in the first quarter.

The retirement business is likely to have benefited from higher net investment spread results, higher variable investment income, higher reserve gains, including favorable impacts due to COVID 19 and lower expenses.

Elevated disability claims are likely to have impacted the Group Insurance business, as a result of COVID-19, in the to-be-reported quarter.

PGIM is likely to have benefited from continued investor appetite for fixed-income strategies and growth in average assets under management.

Assets under management are likely to have benefited from market appreciation and public fixed income inflows, strong investment performance and public fixed income inflows.

The company estimates net investment income to be reduced by $15 million. It will reflect the difference between new money rates and disposition yields of investment portfolio.

The company estimates expenses to be $165 million lower in the first quarter.

The company estimates the first quarter effective tax rate to normalize.

Individual annuities and individual life sales are likely to have increased in the to-be-reported quarter due to continued product repricing and pivot strategy.

Travel and entertainment expenses are expected to have declined due to COVID-19.

Prudential estimates earnings per share to be $2.54 in the first quarter.

The Zacks Consensus Estimate for earnings per share is pegged at $2.68, indicating 15.5% increase from the year-ago period reported figure. The Zacks Consensus Estimate for revenues is pegged at $15.6 billion, indicating a decrease of about 17.2% from the year-ago reported figure.

What the Zacks Model Says

Our proven model shows does not conclusively predict an earnings beat for Prudential this time around. This is because the stock needs to have the right combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold). This is not the case as you can see below.

Earnings ESP: Prudential has an Earnings ESP of 0.00%. This is because both the Most Accurate Estimate and the Zacks Consensus Estimate are pegged at $2.68. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.

Prudential Financial, Inc. Price and EPS Surprise

Zacks Rank: Prudential currently carries a Zacks Rank of 3.

Stocks to Consider

Some insurance stocks with the right combination of elements to come up with an earnings beat this time around are:

Cigna Corporation (CI - Free Report) has an Earnings ESP of +1.01% and a Zacks Rank of 3. You can see the complete list of today’s Zacks #1 Rank stocks here.

American International Group, Inc. (AIG - Free Report) has an Earnings ESP of +0.23% and a Zacks Rank #3.

Oscar Health, Inc. (OSCR - Free Report) has an Earnings ESP of +18.62% and a Zacks Rank of 3.

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