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Based in Des Moines, Iowa, Principal Financial Group, Inc. (PFG) is a prominent global financial services provider specializing in retirement solutions, insurance, and asset management, offering a diverse portfolio of financial products and services to individuals, businesses, and institutional clients worldwide. Valued at a market cap of $20 billion, the company is committed to helping customers achieve their financial goals. Principal Financial leverages innovation and expertise to deliver reliable and comprehensive solutions across multiple markets.
Shares of PFG have underperformed the broader market over the past year. The stock has gained 21.1% over this time frame, while the broader S&P 500 Index ($SPX) has rallied nearly 31.8%. Also, in 2024, PFG is up 10.9% compared to SPX’s 25.8% rise on a YTD basis.
Narrowing the focus, PFG has also trailed the iShares U.S. Financials ETF (IYF). The exchange-traded fund has gained about 50% over the past year and 39.3% on a YTD basis.
On Oct. 24, Principal Financial released its third-quarter earnings, and its shares dropped by 6.6% in the following trading session as its topline and bottom line failed to surpass the market’s expectations.
For the current fiscal year, ending in December, analysts expect PFG’s EPS to grow 7.5% year over year to $7.04 on a diluted basis. The company's earnings surprise history is mixed. It missed the consensus estimate in three of the last four quarters while beating the forecast on another occasion.
Among the 14 analysts covering PFG stock, the consensus rating is a “Hold.” That’s based on one “Strong Buy” rating, 11 “Holds,” and two “Strong Sells.”
This consensus has remained stable over the past months.
On Nov. 19, RBC Capital analyst Mark Dwelle raised the price target on Principal Financial to $91 from $87 while maintaining a “Sector-Perform” rating. Following the company’s Investor Day, Dwelle noted insights into its strategy, market advantages, and end markets and emphasized capital return as a key priority.
The mean price target is $88.38, representing a premium of 1.3% compared to PFG’s current price levels. The Street-high price target of $99 suggests an upside potential of 13.4%.
