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Principal Financial (PFG) Q2 Earnings: Will the Stock Gain?
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We expect Principal Financial Group Inc. (PFG - Free Report) to beat expectations when it reports second-quarter 2016 results on Jul 28, after the market closes.
Why a Likely Positive Surprise?
Our proven model shows that Principal Financial has the right combination of two key ingredients.
Zacks ESP: Earnings ESP, which represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate, is +0.94%. This is because the Most Accurate estimate of $1.07 is pegged higher than the Zacks Consensus Estimate of $1.06. The positive Earnings ESP is a meaningful and leading indicator of a likely earnings beat.
Zacks Rank: Principal Financial holds a Zacks Rank #2 (Buy). Note that stocks with a Zacks Rank of #1 (Strong Buy), 2 or 3 (Hold) have a significantly higher chance of beating earnings.
Conversely, the Sell-rated stocks (Zacks Rank #4 and 5) should never be considered going into an earnings announcement.
Currently, the stock is trading at $44.70. We expect the release to lead to stock movement.
What is Driving the Better-Than-Expected Earnings?
Principal Financial is likely to witness Asset Under Management (AUM) growth in the to-be-reported quarter, primarily due to its extensive distribution footprint, best-in-class solutions and operational discipline.
Further, the company is likely to experience improvement in operating earnings in the second quarter, owing to solid performance at the company’s businesses across most lines and segments. In addition, the cost-saving initiatives undertaken by the company in the quarter should support the bottom line.
Also, Principal Financial has likely displayed net revenue growth at Retirement and Income Solutions – both Fees and Spread. This apart, Principal International and Principal Global Investors might witness net revenue growth in the to-be-reported quarter.
However, the company’s investment results are likely to have suffered owing to a low interest rate environment.
Also, unfavorable currency exchange and volatile equity markets might adversely affect Principal Financial’s results.
With respect to surprise trend, the company delivered a positive earnings surprise in one of the last four quarters.
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:
Federated Investors, Inc. has an Earnings ESP of +2.13% and a Zacks Rank #3. The company is slated to report second-quarter earnings on Jul 28.
The Allstate Corporation (ALL - Free Report) has an Earnings ESP of +1.89% and a Zacks Rank #3. The company is set to report second-quarter earnings on Aug 3.
Cigna Corp. (CI - Free Report) has an Earnings ESP of +1.67% and a Zacks Rank #3. The company is set to report second-quarter earnings on Aug 4.
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Principal Financial (PFG) Q2 Earnings: Will the Stock Gain?
We expect Principal Financial Group Inc. (PFG - Free Report) to beat expectations when it reports second-quarter 2016 results on Jul 28, after the market closes.
Why a Likely Positive Surprise?
Our proven model shows that Principal Financial has the right combination of two key ingredients.
Zacks ESP: Earnings ESP, which represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate, is +0.94%. This is because the Most Accurate estimate of $1.07 is pegged higher than the Zacks Consensus Estimate of $1.06. The positive Earnings ESP is a meaningful and leading indicator of a likely earnings beat.
Zacks Rank: Principal Financial holds a Zacks Rank #2 (Buy). Note that stocks with a Zacks Rank of #1 (Strong Buy), 2 or 3 (Hold) have a significantly higher chance of beating earnings.
Conversely, the Sell-rated stocks (Zacks Rank #4 and 5) should never be considered going into an earnings announcement.
Currently, the stock is trading at $44.70. We expect the release to lead to stock movement.
What is Driving the Better-Than-Expected Earnings?
Principal Financial is likely to witness Asset Under Management (AUM) growth in the to-be-reported quarter, primarily due to its extensive distribution footprint, best-in-class solutions and operational discipline.
Further, the company is likely to experience improvement in operating earnings in the second quarter, owing to solid performance at the company’s businesses across most lines and segments. In addition, the cost-saving initiatives undertaken by the company in the quarter should support the bottom line.
Also, Principal Financial has likely displayed net revenue growth at Retirement and Income Solutions – both Fees and Spread. This apart, Principal International and Principal Global Investors might witness net revenue growth in the to-be-reported quarter.
However, the company’s investment results are likely to have suffered owing to a low interest rate environment.
Also, unfavorable currency exchange and volatile equity markets might adversely affect Principal Financial’s results.
With respect to surprise trend, the company delivered a positive earnings surprise in one of the last four quarters.
PRINCIPAL FINL Price and EPS Surprise
PRINCIPAL FINL Price and EPS Surprise | PRINCIPAL FINL Quote
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:
Federated Investors, Inc. has an Earnings ESP of +2.13% and a Zacks Rank #3. The company is slated to report second-quarter earnings on Jul 28.
The Allstate Corporation (ALL - Free Report) has an Earnings ESP of +1.89% and a Zacks Rank #3. The company is set to report second-quarter earnings on Aug 3.
Cigna Corp. (CI - Free Report) has an Earnings ESP of +1.67% and a Zacks Rank #3. The company is set to report second-quarter earnings on Aug 4.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days.Click to get this free report >>