Prudential Financial (PRU) AI Stock Analysis

• Market Cap: $37.68B
• Dividend Yield: 5.07%
• Average Volume (3M): 1.53M
• Price to Earnings (P/E): 16.8
• Beta (1Y): 0.88
• Revenue Growth: 2.47%
• EPS Growth: 6.88%
• Country: US
• Employees: 37,936
• Sector: Financial
• Sector Strength: 82
• Industry: Insurance - Life
• EPS (TTM): 3.29
• Shares Outstanding: 354,000,000
• 10 Day Avg. Volume: 1,354,412
• 30 Day Avg. Volume: 1,533,462
• PEG Ratio: -1.06
• Price to Book (P/B): 1.27
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 48.93
• Enterprise Value/Market Cap: 1.17
• Enterprise Value/Revenue: 0.17
• Enterprise Value/Gross Profit: 2.70
• Enterprise Value/Ebitda: 2.93
• 1Y Price Target: $114.15
• Price Target Upside: 6.11% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 13

• Rating: 70 Neutral
• Price Target: $118.00 ▲(9.69%Upside)

Prudential Financial's overall score is driven by its strong operational efficiency and positive technical indicators. The stock's valuation is appealing with a high dividend yield. Challenges include high leverage and declining revenue, along with near-term earnings pressures, but strategic corporate actions and strong sales performance offer a positive outlook for growth.

Positive Factors

Financial Performance

PGIM delivered total net flows of $4.3bn, which compared favorably with our forecast of $1.4bn.

Growth Opportunities

Management highlighted the continuing de-risking process and growth opportunities at Prudential.

Market Position

Prudential finished with the top market share for the quarter for sales in Longevity and Structured Settlement sales.

Negative Factors

Earnings Forecast

Price objective falls to $101, predicated upon a 95% of the year-ahead peer P/E multiple of 6.8x on 2027E EPS.

Operating Income

Retirement strategies saw adjusted operating income of $851 million, vs consensus of $940 million, with both Institutional and Individual segments weaker than expected.

Sales Performance

Net flows in Retirement of $409mn missed our forecast of $2.16bn largely due to weaker sales compared to recent quarters.

Prudential Financial Business Overview & Revenue Model

Company Description

Prudential Financial, Inc., together with its subsidiaries, provides insurance, investment management, and other financial products and services in the United States and internationally. It operates through eight segments: PGIM, Retirement, Group Insurance, Individual Annuities, Individual Life, Assurance IQ, International Businesses, and Closed Block. The company offers investment management services and solutions related to public fixed income, public equity, real estate debt and equity, private credit and other alternatives, and multi-asset class strategies to institutional and retail clients, as well as its general account. It also provides a range of retirement investment, and income products and services to retirement plan sponsors in the public, private, and not-for-profit sectors; and group life, long-term and short-term group disability, and group corporate-, bank-, and trust-owned life insurance in the United States, primarily to institutional clients for use in connection with employee and membership benefits plans, as well as sells accidental death and dismemberment, and other supplemental health solutions; and provides plan administration services in connection with its insurance coverages. In addition, the company develops and distributes individual variable and fixed annuity products, principally to the mass affluent and affluent markets; and individual variable, term, and universal life insurance products to the mass middle, mass affluent, and affluent markets in the United States. Further, it provides third-party life, health, Medicare, property and casualty, and term life products to retail shoppers through its digital and independent agent channels. The company offers its products and services to individual and institutional customers through its proprietary and third-party distribution networks. Prudential Financial, Inc. was founded in 1875 and is headquartered in Newark, New Jersey.

How the Company Makes Money

Prudential Financial generates revenue primarily through premiums from its insurance products, fees from asset management services, and investment income. The company's insurance operations, which include selling life insurance and annuities, contribute a significant portion of its revenue through the collection of premiums. Prudential also earns substantial income from managing assets, where it charges fees based on the volume of assets under management. Additionally, the company invests the premiums collected in a variety of financial instruments, generating income through dividends and interest. Prudential's strategic partnerships and joint ventures, particularly in international markets, further enhance its revenue streams and global reach.

Prudential Financial Financial Statement Overview

Summary

Prudential Financial shows strong operational efficiency with high EBIT margins and a strong gross profit margin. However, challenges include declining revenue and profit margins and a highly leveraged balance sheet. Cash flow generation is weakening, although it remains positive.

Income Statement

Prudential Financial shows strong revenue generation with a TTM (Trailing-Twelve-Months) total revenue of $60.46 billion. However, the revenue has decreased when compared to the previous annual revenue of $70.41 billion. The net profit margin stands at a modest 3.81% for the TTM, which is a drop from the previous year. The gross profit margin is strong at 75.38%, indicating effective cost management. EBIT margin is notably high at 37.28%, reflecting operational efficiency, but the declining revenue growth rate is a concern.

Balance Sheet

Prudential Financial's balance sheet indicates high leverage with a debt-to-equity ratio of 10.37, highlighting significant reliance on debt financing. The return on equity is relatively low at 113.96%, primarily due to the low equity base. The equity ratio is notably low at 0.27%, indicating a high level of liabilities compared to assets. These factors suggest potential risks associated with financial stability.

Cash Flow

The cash flow analysis shows a decrease in operating cash flow from the previous year, now at $775 million. The free cash flow has similarly reduced, resulting in a negative free cash flow growth rate. The operating cash flow to net income ratio is 0.34, which denotes some inconsistency in cash generation relative to net income. Despite these challenges, the company maintains positive free cash flow, crucial for sustaining operations.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	60.62B	70.64B	54.27B	56.96B	71.15B	57.03B
Gross Profit	16.38B	17.49B	17.55B	11.86B	28.28B	15.21B
EBITDA	2.56B	3.59B	3.00B	-1.77B	11.05B	132.00M
Net Income	2.30B	2.73B	2.49B	-1.65B	8.87B	-374.00M
Balance Sheet
Total Assets	739.26B	735.59B	721.12B	689.92B	937.58B	940.72B
Cash, Cash Equivalents and Short-Term Investments	70.92B	66.39B	19.42B	324.97B	391.93B	434.41B
Total Debt	22.39B	21.57B	20.87B	21.06B	19.62B	20.95B
Total Liabilities	707.04B	705.46B	691.34B	672.71B	874.97B	872.51B
Stockholders Equity	29.88B	27.87B	27.82B	16.25B	61.88B	67.42B
Cash Flow
Free Cash Flow	775.00M	8.50B	6.51B	5.16B	10.55B	8.28B
Operating Cash Flow	775.00M	8.50B	6.51B	5.16B	9.81B	8.37B
Investing Cash Flow	-23.81B	-28.59B	-12.12B	-7.64B	-5.34B	-16.21B
Financing Cash Flow	20.35B	19.39B	7.74B	4.93B	-3.01B	4.88B

Prudential Financial Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 107.58
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For PRU, the sentiment is Positive. The current price of 107.58 is above the 20-day moving average (MA) of 106.03, above the 50-day MA of 104.44, and below the 200-day MA of 111.71, indicating a neutral trend. The MACD of 1.05 indicates Negative momentum. The RSI at 56.06 is Neutral, neither overbought nor oversold. The STOCH value of 54.05 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for PRU.

Prudential Financial Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
MET	79 Outperform	$53.15B	12.89	16.08%	2.87%	8.77%	110.90%
PUK	77 Outperform	$31.52B	14.42	12.82%	2.62%	-14.78%	34.80%
UNM	75 Outperform	$14.25B	9.64	14.68%	2.06%	1.69%	25.54%
GL	74 Outperform	$10.01B	9.86	20.47%	0.89%	5.41%	16.60%
PRU	70 Neutral	$37.68B	16.85	8.04%	5.07%	2.47%	6.88%
Sector *	67 Neutral	$16.89B	11.80	9.79%	3.77%	12.07%	-8.35%
AFL	63 Neutral	$55.62B	16.06	14.41%	2.25%	-12.66%	-29.30%

Prudential Financial Corporate Events

Prudential Financial Appoints Tom Stoddard as Director

On June 30, 2025, Prudential Financial, Inc. announced the election of Tom Stoddard as an independent director to its Board of Directors, effective immediately. Stoddard, who brings 35 years of experience in financial services, will serve on the Audit and Investment Committees. His extensive background includes roles at Bank of America, Athora Ltd., and Aviva plc, and he is expected to contribute significantly to Prudential’s growth strategy. The appointment is seen as a strategic move to leverage Stoddard’s deep industry knowledge and leadership experience to guide Prudential’s future development.

The most recent analyst rating on (PRU) stock is a Hold with a $110.00 price target. To see the full list of analyst forecasts on Prudential Financial stock, see the PRU Stock Forecast page.

Prudential Financial Holds Annual Shareholders Meeting

The Annual Meeting of Shareholders of Prudential Financial, Inc. was held on May 13, 2025, where key decisions were made regarding the company’s governance and operations. All nominees for the Board of Directors were elected for a one-year term, and the appointment of PricewaterhouseCoopers LLP as the independent registered public accounting firm was ratified. Additionally, the compensation of the company’s named executive officers was approved, while a shareholder proposal for an independent board chairman was not passed.

The most recent analyst rating on (PRU) stock is a Hold with a $110.00 price target. To see the full list of analyst forecasts on Prudential Financial stock, see the PRU Stock Forecast page.

Prudential Financial Corrects Misstatement in Q1 2025 Call

On May 1, 2025, Prudential Financial, Inc. held a conference call to discuss its first-quarter results for 2025. During the call, a misstatement was made by Executive Vice President and CFO Yanela Frias regarding the company’s sensitivity to interest rate changes, which was later corrected. The full transcript, including the correction, will be available on the company’s Investor Relations website.

Prudential Financial Reports Q1 2025 Earnings Results

Prudential Financial reported its first quarter 2025 results, with net income of $707 million, down from $1.138 billion in the same quarter last year. Despite lower net income, the company saw an increase in after-tax adjusted operating income to $1.188 billion, driven by strong sales in global retirement and insurance businesses, and robust investment performance. The company returned $736 million to shareholders through share repurchases and dividends, and aims to continue balancing business growth with shareholder returns. CEO Andy Sullivan emphasized the company’s commitment to executing its strategy to improve financial performance and maintain its position as a leader in investment, insurance, and retirement security.

Prudential Financial Reveals Q1 2025 Financial Results

Prudential Financial disclosed preliminary financial results for the quarter ended March 31, 2025, revealing a resegmentation of its International Businesses segment and an update to internal expense allocations effective January 1, 2025. The PGIM segment reported $1.39 trillion in assets under management, while alternative investment income from the General Account was below expectations. The resegmentation aligns with changes in management structure, and the expense allocation update impacts segment results but not the company’s consolidated results.