Shares of Prudential Financial Inc. (PRU Quick QuotePRU - Free Report) have gained 11.7% in the past year compared with the industry’s growth of 4.7%.

The rally has been supported by improving operating earnings, strong retirement and annuity demand, higher investment spreads and solid performance at PGIM. Growth in asset-management fees and a strong capital position have further bolstered investor confidence. Prudential Financial has beaten earnings estimates in three of the past four quarters and missed in one, with an average of 10.8%.

Shares of some of its peers, such as CNO Financial Group, Inc. (CNO Quick QuoteCNO - Free Report) , Assurant, Inc. (AIZ Quick QuoteAIZ - Free Report) and Enact Holdings, Inc. (ACT Quick QuoteACT - Free Report) , have gained 34.5%, 22.6% and 28.7%, respectively, in the past year.

1-Year Price Performance: PRU, CNO, AIZ, ACT & Industry

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PRU’s Valuation

Shares of Prudential Financial are currently trading at a price-to-earnings multiple of 7.62X, which is lower than the industry average of 8.69X. The insurer has a Value Score of A.

Image Source: Zacks Investment Research

Shares of Assurant, Enact Holdings and CNO Financial are trading at a multiple higher than the industry average.  

Efficient Use of Shareholder Capital

Prudential Financial’s trailing 12-month return on equity of 16.7% compared favorably with the industry’s 16.6%, reflecting the company’s efficiency in utilizing shareholders’ funds.

Growth Projections for PRU

The Zacks Consensus Estimate for Prudential Financial’s 2026 revenues is pegged at $58.91 billion, implying a 2.1% year-over-year improvement. The 2026 earnings per share (EPS) estimate is pegged at $14.50 per share, implying a 0.5% year-over-year increase.

The consensus estimate for 2027 EPS and revenues indicates an increase of 2.9% and 2.2%, respectively, from the corresponding 2026 estimates. Long-term earnings growth is expected to be 4.6%.

Optimistic Analyst Sentiment on PRU

The Zacks Consensus Estimate for 2026 and 2027 earnings estimates have moved up 2.3% and 1.2%, respectively, over the last 60 days.

Key Points to Note for PRU

Prudential Financial continues to benefit from growing demand for retirement-income solutions and pension risk transfer opportunities. Rising demand for guaranteed retirement income should support annuity sales and spread income growth. The company is also targeting the roughly $3 trillion U.S. corporate pension market and plans to expand its pension risk transfer expertise into Europe, creating additional growth opportunities.

Prudential Financial is focusing on protection products and distribution channels that offer attractive returns with lower capital requirements. Growth in term life, indexed universal life and variable universal life products, supported by disciplined pricing, product innovation and broader distribution, should strengthen Individual Life. Group Insurance is expected to provide earnings diversification and steady cash flow. This shift toward capital-light businesses should support profitability and capital efficiency over the long term.

Higher investment income remains a key earnings driver. Prudential Financial continues to benefit from reinvesting maturing assets at higher yields, expanding investment spreads and boosting earnings across its United States and International insurance businesses.

PGIM remains an important growth driver, supported by higher asset-management fees, strong investment performance and continued third-party inflows. Prudential Financial also aims to significantly increase PGIM's contribution to overall earnings.

PRU's international presence supports diversification, with Japan and Europe remaining key retirement and protection markets. However, its plan to exit select emerging markets could release more than $3 billion of capital, which can be redeployed toward higher-growth businesses such as PGIM and retirement operations, thereby improving capital allocation and long-term earnings growth.

Prudential Financial is targeting $750 million in pretax run-rate benefits by 2028, significantly above its previous target. The efficiency initiatives should support margins and provide an additional boost to earnings. Management expects these actions to create capacity for reinvestment while improving operating efficiency.

PRU continues to return capital to shareholders through share repurchases and dividends while investing in higher-return businesses. In the first six months of 2026, it repurchased $500 million of shares and paid $989 million in dividends. Strong liquidity, expense discipline and product innovation should support earnings growth and long-term value creation.

Risks for PRU

The biggest near-term headwind remains Prudential of Japan’s voluntary sales suspension following compliance issues. Management expects the suspension to reduce 2026 pre-tax adjusted operating income by $525-$575 million. Additionally, given its significant operations in Japan and other international markets, unfavorable currency movements could reduce reported revenues and earnings.

PRU plans to exit select emerging markets and redirect more than $3 billion toward higher-priority businesses, including PGIM. However, weakness in U.S. Legacy Products could slow the improvement in earnings quality.

Conclusion

Strong retirement and annuity demand, higher spread income, PGIM growth, cost savings and capital optimization provide multiple avenues for Prudential Financial to sustain earnings growth. International operations, improving investment income, and strong liquidity should support long-term growth. However, Japan-related issues and market volatility remain risks. 

Coupled with higher return on equity, favorable estimates, optimistic analyst sentiment and attractive valuations, it is wise to retain this Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.