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PRU Stock Trading at Discount to Industry at 7.28X: Time to Hold?
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Key Takeaways
Prudential Financial sees strong retirement product demand and global expansion that support growth.
Its investments, acquisitions and emerging-market partnerships aim to build scale for long-term growth.
International strength in Japan, Brazil and Malaysia offers key opportunities despite annuity pressures.
Prudential Financial Inc. (PRU - Free Report) shares are trading at a discount compared to the Zacks Multi-line Insurance industry. Its shares are currently trading at a price-to-earnings multiple of 7.28, which is lower than the industry average of 8.57X, the Finance sector’s 17X and the Zacks S&P 500 composite’s 23.36X. The insurer has a Value Score of A.
The insurer has a market capitalization of $37.99 billion. The average volume of shares traded in the last three months was 1.63 million.
Shares of Assurant, Inc. (AIZ - Free Report) and CNO Financial Group, Inc. (CNO - Free Report) are trading at a multiple higher than the industry average, while Enact Holdings, Inc. (ACT - Free Report) shares are trading at a discount.
Image Source: Zacks Investment Research
Growth Projections for PRU Encouraging
The Zacks Consensus Estimate for Prudential Financial’s 2025 earnings per share indicates a year-over-year increase of 14.6%. The consensus estimate for 2026 earnings per share and revenues indicates an increase of 2.7% and 0.8%, respectively, from the corresponding 2025 estimates.
PRU’s Price Performance
Shares of this multi-line insurer have lost 9% in the year-to-date period and underperformed the industry’s growth of 5%.
Image Source: Zacks Investment Research
Optimistic Analyst Sentiment on PRU
Seven of the eight analysts covering the stock have raised earnings estimates for 2025 and four of the eight analysts have raised their estimates for 2026 over the past 30 days. The Zacks Consensus Estimate for 2025 and 2026 earnings has moved 4.1% and 0.4% north, respectively, in the past 30 days.
Target Price Reflects Potential Upside
Based on short-term price targets offered by 15 analysts, the Zacks average price target is $117.07 per share. The average indicates a potential 8% upside from the last closing price.
Image Source: Zacks Investment Research
Key Points to Note
Prudential Financial is witnessing huge demand for retirement benefit products for baby boomers, which is expected to continue. The U.S. Census Bureau projects that nearly 25% of the population will be 65 years or older by 2050. PRU’s vast distribution network, compelling product portfolio and superior brand image will give it a competitive edge. The company intends to be a global leader in expanding its access to investment, insurance and retirement security.
It undertakes several strategic initiatives, which position it well for long-term growth. It continues to invest in the long-term sustainable growth of the business through programmatic acquisitions and partnerships in emerging markets to build scale and complement businesses in support of long-term growth.
Prudential Financial has a strong international presence that gives it more organic growth opportunities than its peers. Expanding its international business is vital for long-term growth. PRU has a strong footprint in Japan, which offers attractive opportunities to capitalize on protection products and retirement needs and has historically generated ROE in the 20% range. Its business in Brazil has gained sufficient scale and should become an important contributor to earnings growth in the international division over the next few years. It has also expanded in Malaysia, which is an attractive market with low life insurance penetration, a well-developed regulatory environment and long-term growth potential.
PRU has been increasing its dividend for the past 16 years. The company continues to balance investments for the growth of businesses along with returning capital to shareholders.
Conclusion
Prudential Financial continues to benefit from its solid asset-based businesses, improved margins in the Group Insurance business and international operations. A high-performing asset management business and deeper reach in the pension risk transfer market are catalysts for long-term growth.
Prudential Financial’s exposure to products like annuities and universal life, which guarantee minimum return, will strain its capital. Its results have been suffering due to additional reserve accretion required when low interest rate increases the value of these liabilities. The company expects individual annuities sales to continue to be lower in the near term due to the repricing and repositioning of products. Lower sales reflect its pivot to less market-sensitive products.
PRU has a VGM Score of B. Stocks with a favorable VGM Score are those with the most attractive value, best growth and most promising momentum compared with peers.
Image: Bigstock
PRU Stock Trading at Discount to Industry at 7.28X: Time to Hold?
Key Takeaways
Prudential Financial Inc. (PRU - Free Report) shares are trading at a discount compared to the Zacks Multi-line Insurance industry. Its shares are currently trading at a price-to-earnings multiple of 7.28, which is lower than the industry average of 8.57X, the Finance sector’s 17X and the Zacks S&P 500 composite’s 23.36X. The insurer has a Value Score of A.
The insurer has a market capitalization of $37.99 billion. The average volume of shares traded in the last three months was 1.63 million.
Shares of Assurant, Inc. (AIZ - Free Report) and CNO Financial Group, Inc. (CNO - Free Report) are trading at a multiple higher than the industry average, while Enact Holdings, Inc. (ACT - Free Report) shares are trading at a discount.
Image Source: Zacks Investment Research
Growth Projections for PRU Encouraging
The Zacks Consensus Estimate for Prudential Financial’s 2025 earnings per share indicates a year-over-year increase of 14.6%. The consensus estimate for 2026 earnings per share and revenues indicates an increase of 2.7% and 0.8%, respectively, from the corresponding 2025 estimates.
PRU’s Price Performance
Shares of this multi-line insurer have lost 9% in the year-to-date period and underperformed the industry’s growth of 5%.
Image Source: Zacks Investment Research
Optimistic Analyst Sentiment on PRU
Seven of the eight analysts covering the stock have raised earnings estimates for 2025 and four of the eight analysts have raised their estimates for 2026 over the past 30 days. The Zacks Consensus Estimate for 2025 and 2026 earnings has moved 4.1% and 0.4% north, respectively, in the past 30 days.
Target Price Reflects Potential Upside
Based on short-term price targets offered by 15 analysts, the Zacks average price target is $117.07 per share. The average indicates a potential 8% upside from the last closing price.
Image Source: Zacks Investment Research
Key Points to Note
Prudential Financial is witnessing huge demand for retirement benefit products for baby boomers, which is expected to continue. The U.S. Census Bureau projects that nearly 25% of the population will be 65 years or older by 2050. PRU’s vast distribution network, compelling product portfolio and superior brand image will give it a competitive edge. The company intends to be a global leader in expanding its access to investment, insurance and retirement security.
It undertakes several strategic initiatives, which position it well for long-term growth. It continues to invest in the long-term sustainable growth of the business through programmatic acquisitions and partnerships in emerging markets to build scale and complement businesses in support of long-term growth.
Prudential Financial has a strong international presence that gives it more organic growth opportunities than its peers. Expanding its international business is vital for long-term growth. PRU has a strong footprint in Japan, which offers attractive opportunities to capitalize on protection products and retirement needs and has historically generated ROE in the 20% range. Its business in Brazil has gained sufficient scale and should become an important contributor to earnings growth in the international division over the next few years. It has also expanded in Malaysia, which is an attractive market with low life insurance penetration, a well-developed regulatory environment and long-term growth potential.
PRU has been increasing its dividend for the past 16 years. The company continues to balance investments for the growth of businesses along with returning capital to shareholders.
Conclusion
Prudential Financial continues to benefit from its solid asset-based businesses, improved margins in the Group Insurance business and international operations. A high-performing asset management business and deeper reach in the pension risk transfer market are catalysts for long-term growth.
Prudential Financial’s exposure to products like annuities and universal life, which guarantee minimum return, will strain its capital. Its results have been suffering due to additional reserve accretion required when low interest rate increases the value of these liabilities. The company expects individual annuities sales to continue to be lower in the near term due to the repricing and repositioning of products. Lower sales reflect its pivot to less market-sensitive products.
PRU has a VGM Score of B. Stocks with a favorable VGM Score are those with the most attractive value, best growth and most promising momentum compared with peers.
Given its price performance, we prefer to remain cautious on this Zacks Rank #3 (Hold) stock. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.