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Based in Newark, New Jersey, Prudential Financial, Inc. (PRU) is a financial service company that offers an array of financial products and services to both retail and institutional customers. Valued at a market cap of $40.7 billion, the company provides insurance, annuities, retirement-related services, mutual funds, investment management and real estate services.
Companies worth more than $10 billion or more are generally described as “large-cap stocks,” and Prudential Financial fits right into that category. The company offers its services in the United States and over 40 other countries and is renowned for helping individual and institutional customers grow and protect their wealth.
Shares of the insurer PRU have dipped 11.9% from its 52-week high of $128.53. PRU has declined 3.4% over the past three months, lagging behind the broader Invesco S&P 500 Equal Weight Financials ETF’s (RSPF) 8.9% gain over the same time frame.
In the longer term, PRU stock is up 9.2% on a YTD basis, lagging behind RSPF’s 13.9% gains. Moreover, shares of PRU have gained 20.1% over the past 52 weeks, compared to RSPF’s 27.8% return over the same time frame.
PRU has been mostly trading above its 200-day moving average since November last year, but has remained below its 50-day moving average since September.
PRU’s underperformance is driven by major headwinds faced by the company, including inflationary and interest rate pressure, weak consumer confidence as well as uneven performance in Asian economies.
Moreover, despite slightly beating the revenue estimates, the stock dropped nearly 10% following its Q2 earnings release on Aug. 1 due to its lower-than-expected adjusted profit of $3.39 per share, despite a year-over-year increase. Additionally, the higher-than-expected total benefits and expenses of $12.2 billion, coupled with a decline in adjusted book value per share and operating return on average equity, raised concerns about rising costs and reduced profitability.
However, PRU has outpaced its rival, MetLife, Inc.’s (MET) 17.2% gain over the past 52 weeks but has lagged behind MET’s 12% return on a YTD basis.
As PRU has underperformed the broader sector over the past year, analysts remain about its prospects. The stock has a consensus rating of “Hold” from the 16 analysts covering the stock, and the mean price target of $120.77 suggests a premium of just 6.6% to its current levels.
On the date of publication, Sohini Mondal 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.
