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Why Is Prudential (PRU) Up 4.6% Since Last Earnings Report?

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It has been about a month since the last earnings report for Prudential (PRU - Free Report) . Shares have added about 4.6% in that time frame, underperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Prudential due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.

Prudential Financial Q1 Earnings Miss, Revenues Rise Y/Y

Prudential Financial, Inc. reported first-quarter 2024 adjusted operating income of $3.12 per share, which missed the Zacks Consensus Estimate by 1.2%. The bottom line climbed 15.5% year over year.

Total revenues of $21.7 billion jumped 44.8% year over year, beating the Zacks Consensus Estimate by 46.8%. The rise in revenues was due to higher premiums, net investment income, asset management fees, commissions and other income. Prudential Financial's quarterly results reflected a rise in asset management fees, positive third-party net flows, improved net investment spread results and favorable underwriting results, offset by higher expenses.

Operational Update

Total benefits and expenses amounted to $20.2 billion, which soared 47.6% year over year in the first quarter. This increase was due to higher insurance and annuity benefits, interest credited to policyholders' account balances, interest expense, amortization of acquisition costs and general and administrative expenses. The figure was higher than our estimate of $11.7 billion.

Quarterly Segment Update

Prudential Global Investment Management’s (PGIM) adjusted operating income of $169 million increased 12% year over year. The metric beat the Zacks Consensus Estimate by 14%. Our estimate was $137.2 million. This increase was driven by higher asset management fees and other related revenues due to improved incentive fees and seed and co-investment income. It was partially offset by higher expenses.

PGIM’s assets under management of $1.341 trillion in the reported quarter increased 6% year over year. The increase was due to equity market appreciation and positive third-party net flows.

The U.S. Businesses delivered an adjusted operating income of $839 million, which grew 10.4% year over year. The metric missed the Zacks Consensus Estimate by 12%. Our estimate was $1 billion. The rise was primarily driven by higher net investment spread results and more favorable underwriting results. It was partially offset by higher expenses and lower net fee income.

International Businesses’ adjusted operating income rose 6.7% year over year to $896 million in the first quarter. The metric was higher than our estimate of $878.4 million. This increase was primarily due to higher net investment spread results and joint venture earnings, partially offset by less favorable underwriting results.

Corporate and Other incurred an adjusted operating loss of $435 million, narrower than the loss of $471 million reported a year ago, primarily due to a decline in expenses. The figure was narrower than the Zacks Consensus Estimate of a loss of $474 million and our estimate of a loss of $471.3 million.

Capital Deployment

Prudential Financial managed to return capital to its shareholders in the form of share repurchases worth $250 million and dividends worth $476 million in the first quarter.

Financial Update

PRU exited the first quarter with cash and cash equivalents of $18.7 billion, which decreased 3.5% from the end of 2023. Total debt balance of $19.9 billion increased 2.3% from 2023-end. As of Mar 31, 2024, Prudential Financial’s assets under management and administration rose 6.5% year over year to $1.67 trillion. Adjusted book value per common share, a measure of the company’s net worth, came in at $97.03, which decreased 0.2% year over year. Operating return on average equity was 13% in the first quarter, which expanded 170 basis points year over year.

How Have Estimates Been Moving Since Then?

It turns out, estimates review have trended upward during the past month.

VGM Scores

Currently, Prudential has a nice Growth Score of B, though it is lagging a bit on the Momentum Score front with a C. However, the stock was allocated a grade of A on the value side, putting it in the top 20% for this investment strategy.

Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.


Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Prudential has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.

Performance of an Industry Player

Prudential belongs to the Zacks Insurance - Multi line industry. Another stock from the same industry, Everest Group (EG - Free Report) , has gained 3.5% over the past month. More than a month has passed since the company reported results for the quarter ended March 2024.

Everest Group reported revenues of $4.13 billion in the last reported quarter, representing a year-over-year change of +26%. EPS of $16.32 for the same period compares with $11.31 a year ago.

For the current quarter, Everest Group is expected to post earnings of $17.21 per share, indicating a change of +13.2% from the year-ago quarter. The Zacks Consensus Estimate has changed -0.9% over the last 30 days.

Everest Group has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of B.

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