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Valued at a market cap of $40.8 billion, Prudential Financial, Inc. (PRU) is a global leader offering life insurance, annuities, retirement services, mutual funds, investment management, and real estate services. It serves customers in the United States and internationally, with a presence in Asia, Europe, and Latin America, leveraging proprietary and third-party distribution networks. The Newark, New Jersey-based is expected to announce its fiscal Q4 earnings results after the market closes on Tuesday, Feb. 4.
Ahead of this event, analysts expect the financial services company to report a profit of $3.36 per share, up 30.2% from $2.58 per share in the year-ago quarter. The company has surpassed Wall Street's earnings estimates in one of the last four quarters while missing on three other occasions. In Q3, the company exceeded the consensus EPS estimates by a slight margin.
For fiscal 2024, analysts expect PRU to report an EPS of $13.34, up 14.8% from $11.62 in fiscal 2023. In addition, EPS is expected to grow 10.3% year-over-year to $14.72 in fiscal 2025.
Shares of PRU have risen 10.4% over the past 52 weeks, lagging behind both the S&P 500 Index's ($SPX) 21.8% surge and the Financial Select Sector SPDR Fund’s (XLF) 25.2% return over the same period.
Despite reporting better-than-expected Q3 adjusted operating income of $3.48 per share and revenue of $19.5 billion on Oct. 30, shares of Prudential Financial fell 3.3% the next day due to concerns over higher expenses across various segments, including PGIM and International Businesses. Additionally, the company's adjusted operating income saw a 3.8% year-over-year decline. Additionally, doubling total benefits and expenses to $17.8 billion weighed on sentiment, as it exceeded estimates significantly and highlighted rising costs. Lastly, the wider-than-expected adjusted operating loss in the Corporate and Other segment also added to investor skepticism.
Analysts' consensus view on Prudential Financial’s stock is cautious, with a "Hold" rating overall. Among 17 analysts covering the stock, two recommend "Strong Buy," 14 suggest "Hold," and one indicates “Strong Sell.” The average analyst price target for PRU is $131.40, indicating a 14.7% potential upside from the current levels.
