We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Principal Financial Trades Above 200-Day SMA: Time to Hold PFG Stock?
Read MoreHide Full Article
Key Takeaways
Principal Financial shares have gained 4.4% year to date, underperforming the industry's return of 7%.
PFG is positioned for long-term revenue growth across all segments, supported by higher premiums and fees.
Dividend is raised for the seventh straight quarter in Q2 2025, supporting a 3.7% dividend yield.
Principal Financial Group, Inc. (PFG - Free Report) has been trading above its 200-day simple moving average (SMA), signaling a short-term bullish trend. Its share price, as of Wednesday, was $80.84, down 12.1% from its 52-week high of $91.98.
The 200-day SMA is a technical indicator that shows the average closing price of a stock or asset over the last 200 trading days, helping to identify the long-term trend. This long-term moving average serves as a "line in the sand" for market direction, with the moving average line itself acting as a potential indicator of support or resistance.
Image Source: Zacks Investment Research
With a capitalization of $18 billion, the average number of shares traded in the last three months was 1.2 million.
Price Performance of PFG
Shares of Principal Financial have gained 4.4% year to date (YTD). However, shares have underperformed the industry, the Finance sector and the Zacks S&P 500 composite’s return of 7%, 12.5% and 9.8%, respectively, in the YTD period.
Image Source: Zacks Investment Research
Expensive Valuation of PFG
The insurer’s shares are trading at a price-to-earnings multiple of 9.13, higher than the industry average of 9.04. PFG is also expensive compared to Enact Holdings, Inc. (ACT - Free Report) , Everest Group, Ltd. (EG - Free Report) and Radian Group Inc. (RDN - Free Report) .
PFG’s Encouraging Growth Projection
The Zacks Consensus Estimate for Principal Financial’s 2025 earnings per share indicates a year-over-year increase of 18.3%. The consensus estimate for revenues is pegged at $15.86 billion, implying a year-over-year improvement of 1.4%.
The consensus estimate for 2026 earnings per share and revenues indicates an increase of 11.2% and 7.1%, respectively, from the corresponding 2025 estimates.
Target Price Reflects PFG’s Potential Upside
Based on short-term price targets offered by 13 analysts, the Zacks average price target is $85.77 per share. The average indicates a potential 6.48% upside from the last closing price.
Image Source: Zacks Investment Research
Factors Benefiting PFG Stock
Principal Financial’s revenue growth is expected to improve in the long run, riding on higher premiums and other considerations, fees and other revenues, and improved net investment income across its segments.
Principal Financial continues to benefit from its strength and leadership in retirement and long-term savings, group benefits and protection in the United States, retirement and long-term savings in Latin America and Asia, plus global asset management, which helps it deliver solid operating earnings.
PFG estimates solid revenue growth as well as margin expansion across all its segments over the long term.
The Specialty Benefits Insurance business should continue to gain from record sales, strong retention and employment growth. Favorable claims, growth in the business and disciplined expense management should benefit its pre-tax operating earnings.
Strong institutional flows across equities, real estate and specialty fixed income, highlighting the value of diversified distribution through its institutional, retail and retirement channels, are likely to drive positive net cash flow.
Principal Financial’s extensive distribution footprint, strategic buyouts and operational discipline should enhance the assets under management growth.
PFG boasts a strong capital position, with sufficient cash generation capabilities and liquidity. To reflect the business mix and risk profile, PFG revised the RBC target to a range of 375-400%. For 2025, PFG remains well-positioned to deliver on enterprise long-term financial targets, with 9% to 12% growth in earnings per share and 75% to 85% free capital flow conversion.
PFG’s Distribution of Wealth
Principal Financial’s wealth distribution through share buybacks and dividend payments looks impressive. In the second quarter of 2025, PFG raised the dividend for the seventh consecutive quarter, aligned with the targeted 40% dividend payout ratio and demonstrated confidence in continued growth and overall performance. It was a 7% increase over the year-ago quarter and a 9% rise for the full year. It also boasts a solid dividend yield of 3.7%, higher than the industry average of 2.7%. The insurer continues to expect to deliver on the targeted 75% to 85% free capital flow for 2025.
PFG targets $1.4 billion to $1.7 billion of capital deployments in 2025. It intends to spend 35-45% of its net income on share buybacks and about 10% on strategic M&A activities to enhance capabilities and support organic growth.
Final Take on PFG
Principal Financial's financial stability and favorable growth estimates bode well for growth. PFG should benefit from strategic buyouts, strong retention, higher single premium annuity sales, effective capital deployment and positive net cash flow.
Image: Bigstock
Principal Financial Trades Above 200-Day SMA: Time to Hold PFG Stock?
Key Takeaways
Principal Financial Group, Inc. (PFG - Free Report) has been trading above its 200-day simple moving average (SMA), signaling a short-term bullish trend. Its share price, as of Wednesday, was $80.84, down 12.1% from its 52-week high of $91.98.
The 200-day SMA is a technical indicator that shows the average closing price of a stock or asset over the last 200 trading days, helping to identify the long-term trend. This long-term moving average serves as a "line in the sand" for market direction, with the moving average line itself acting as a potential indicator of support or resistance.
Image Source: Zacks Investment Research
With a capitalization of $18 billion, the average number of shares traded in the last three months was 1.2 million.
Price Performance of PFG
Shares of Principal Financial have gained 4.4% year to date (YTD). However, shares have underperformed the industry, the Finance sector and the Zacks S&P 500 composite’s return of 7%, 12.5% and 9.8%, respectively, in the YTD period.
Image Source: Zacks Investment Research
Expensive Valuation of PFG
The insurer’s shares are trading at a price-to-earnings multiple of 9.13, higher than the industry average of 9.04. PFG is also expensive compared to Enact Holdings, Inc. (ACT - Free Report) , Everest Group, Ltd. (EG - Free Report) and Radian Group Inc. (RDN - Free Report) .
PFG’s Encouraging Growth Projection
The Zacks Consensus Estimate for Principal Financial’s 2025 earnings per share indicates a year-over-year increase of 18.3%. The consensus estimate for revenues is pegged at $15.86 billion, implying a year-over-year improvement of 1.4%.
The consensus estimate for 2026 earnings per share and revenues indicates an increase of 11.2% and 7.1%, respectively, from the corresponding 2025 estimates.
Target Price Reflects PFG’s Potential Upside
Based on short-term price targets offered by 13 analysts, the Zacks average price target is $85.77 per share. The average indicates a potential 6.48% upside from the last closing price.
Image Source: Zacks Investment Research
Factors Benefiting PFG Stock
Principal Financial’s revenue growth is expected to improve in the long run, riding on higher premiums and other considerations, fees and other revenues, and improved net investment income across its segments.
Principal Financial continues to benefit from its strength and leadership in retirement and long-term savings, group benefits and protection in the United States, retirement and long-term savings in Latin America and Asia, plus global asset management, which helps it deliver solid operating earnings.
PFG estimates solid revenue growth as well as margin expansion across all its segments over the long term.
The Specialty Benefits Insurance business should continue to gain from record sales, strong retention and employment growth. Favorable claims, growth in the business and disciplined expense management should benefit its pre-tax operating earnings.
Strong institutional flows across equities, real estate and specialty fixed income, highlighting the value of diversified distribution through its institutional, retail and retirement channels, are likely to drive positive net cash flow.
Principal Financial’s extensive distribution footprint, strategic buyouts and operational discipline should enhance the assets under management growth.
PFG boasts a strong capital position, with sufficient cash generation capabilities and liquidity. To reflect the business mix and risk profile, PFG revised the RBC target to a range of 375-400%. For 2025, PFG remains well-positioned to deliver on enterprise long-term financial targets, with 9% to 12% growth in earnings per share and 75% to 85% free capital flow conversion.
PFG’s Distribution of Wealth
Principal Financial’s wealth distribution through share buybacks and dividend payments looks impressive. In the second quarter of 2025, PFG raised the dividend for the seventh consecutive quarter, aligned with the targeted 40% dividend payout ratio and demonstrated confidence in continued growth and overall performance. It was a 7% increase over the year-ago quarter and a 9% rise for the full year. It also boasts a solid dividend yield of 3.7%, higher than the industry average of 2.7%. The insurer continues to expect to deliver on the targeted 75% to 85% free capital flow for 2025.
PFG targets $1.4 billion to $1.7 billion of capital deployments in 2025. It intends to spend 35-45% of its net income on share buybacks and about 10% on strategic M&A activities to enhance capabilities and support organic growth.
Final Take on PFG
Principal Financial's financial stability and favorable growth estimates bode well for growth. PFG should benefit from strategic buyouts, strong retention, higher single premium annuity sales, effective capital deployment and positive net cash flow.
Given the premium valuation, investors should wait for a better entry point for this Zacks Rank #3 (Hold) stock. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.