In key news on UK stocks, Prudential PLC (GB:PRU) announced solid Q1 2024 results, which were marred by the missing buyback news that was eagerly awaited by investors. The company’s new business profits grew by 11% (excluding economic impacts) in the first quarter to $810 million compared to the prior corresponding period. Despite this, shares fell by over 4% as of writing, leading the list of top fallers on the FTSE 100 index.
Even though there was no news on the expected buyback by the company, management assured its ongoing commitment to enhancing shareholder returns. The company expects to provide further updates on its capital management plans before its half-yearly results for 2024, scheduled for August.
Prudential PLC specializes in life and health insurance and asset management, with a primary focus on the Asian and African markets.
Prudential PLC’s Q1 Triumph
Prudential’s APE (annual premium equivalent) sales increased by 7% to $1.625 billion. Despite some headwinds in regions like Vietnam and Indonesia, total APE sales have shown consistent sequential growth since the third quarter of 2023. This underscores strong product demand across Asia along with the company’s multi-channel distribution in different markets.
Prudential emphasized its resilient performance despite comparison with the strong results in Q1 2023, following the reopening of the border between Hong Kong and the Chinese Mainland.
Jefferies analyst Philip Kett compared Prudential’s results to those of its Hong Kong-based competitor AIA Group (HK:1299), which announced Q1 results yesterday. AIA Group reported a remarkable 31% surge in the value of new business (VONB) at constant exchange rates, reaching a record quarterly high of $1.33 billion. AIA also announced an additional buyback of $2 billion, taking the total program to $12 billion.
Kett is optimistic about the company’s next update regarding its capital management plans. Kett has a Buy rating on Prudential stock with a price target of 1,750p, implying a growth potential of 150%.
Is Prudential a Good Share to Buy?
Over the last 12 months, PRU stock has lost 40% in trading. This is mainly attributed to the challenges faced by the UK insurance sector due to higher claim costs.
Moving forward, analysts remain bullish on PRU stock and have rated it a Strong Buy. According to TipRanks, PRU stock has received Buy recommendations from all the 10 analysts covering it. The Prudential share price target is 1,368.76p, which implies a huge upside of 93% from the current trading level.
