Earnings Preview: What to Expect From Principal…

Earnings Preview: What to Expect From Principal Financial Group’s Report

Valued at a market cap of $19.9 billion, Iowa-based Principal Financial Group, Inc. (PFG) is a global investment management powerhouse, providing a vast range of financial products and services. The company offers retirement plans, asset management, and insurance to businesses, individuals, and institutions. Principal Financial is all set to unveil its fiscal Q2 earnings results after the market closes on Thursday, Jul. 25.

Ahead of this event, analysts expect PFG to report a profit of $1.86 per share, up 21.6% from $1.53 per share in the year-ago quarter. The company has surpassed Wall Street's bottom-line estimates in two of the last four quarters while missing on two other occasions. In the most recent quarter, the company’s adjusted EPS of $1.65 jumped nearly 11% year over year but missed the consensus estimate by a 5.2% margin.

For fiscal 2024, analysts expect PFG to report EPS of $7.43, up 13.4% from $6.55 in fiscal 2023. Looking forward to fiscal 2025, EPS is expected to grow by 14% annually to $8.47.

Shares of Principal Financial have surged 8.1% over the past 52 weeks, lagging behind both the S&P 500 Index’s ($SPX) gain of 25.6% and S&P Insurance ETF SPDR’s (KIE) returns of 24.6% during the same time frame.

On April 25, Principal Financial announced its Q1 earnings results. Despite exceeding revenue estimates, a weaker-than-expected bottom line figure triggered a negative market response, causing its shares to plunge nearly 2.4% in the subsequent trading session.

However, the company’s aggressive strategic investments have sparked recent stock price fluctuations. These bold moves paid off when the company earned a coveted "Strong Buy" rating from Raymond James on July 9, driving its shares to surge by almost 3.1% on the very same day.

Overall, the consensus analyst rating on PFG stock is cautious, with a "Hold" rating. Out of 14 analysts covering the stock, opinions include one "Strong Buy,” 11 "Holds," and two "Strong Sells." This consensus, however, is slightly more bullish than a month ago, with three “Strong Sell” ratings on the stock.

The average analyst price target for PFG is $85.33, suggesting a marginal potential upside from current levels.

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On the date of publication, Anushka Mukherjee did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.

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