Prudential Financial (PRU) AI Stock Analysis

• Market Cap: $36.08B
• Dividend Yield: 5.15%
• Average Volume (3M): 1.61M
• Price to Earnings (P/E): 16.1
• Beta (1Y): 0.91
• 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: 1,663,754
• 30 Day Avg. Volume: 1,613,735
• PEG Ratio: >-0.01
• Price to Book (P/B): 1.27
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 49.03
• Enterprise Value/Market Cap: 1.19
• Enterprise Value/Revenue: 0.16
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: 0.94
• 1Y Price Target: $113.15
• Price Target Upside: 11.02% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 13

• Rating: 71 Outperform
• Price Target: ―

Prudential Financial demonstrates solid operational efficiency and a strong capital position, which are significant strengths. However, challenges include high leverage and declining revenue growth, posing risks. Despite these concerns, the company's reasonable valuation and attractive dividend yield provide a buffer, contributing to a moderately positive stock evaluation.

Positive Factors

Acquisitions

The recent Prismic deal is seen as a positive, paving the way for more accretive third-party transactions.

Market Share

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

Sales Growth

Individual Life sales increased 59% YoY, driven by Variable Life.

Negative Factors

Earnings

PRU's 4Q:24 operating EPS of $2.96 was below consensus at $3.23.

Price Objective

Price objective falls to $101, previously $106, indicating a modest decline in forward EPS forecasts.

Retirement Segment

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 its insurance and investment products. The company earns money from premiums paid by policyholders for life insurance and annuity products, which provide financial protection and income solutions. In addition, Prudential manages a substantial portfolio of investments, generating income through asset management fees from mutual funds and institutional accounts. The company's global presence allows it to tap into diverse markets, with significant contributions from its international insurance operations. Prudential also benefits from strategic partnerships and joint ventures that enhance its distribution capabilities and expand its product offerings, enabling it to reach a broader customer base and drive revenue growth.

Prudential Financial Financial Statement Overview

Summary

Prudential Financial shows strong operational efficiency with high EBIT margins, though faced with declining revenue and profit margins. The high leverage indicated on the balance sheet poses risks to financial stability, and cash flow generation has weakened, despite remaining 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
60.37B	70.64B	53.98B	54.58B	71.18B	57.09B
	Gross Profit
0.00	70.64B	0.00	0.00	0.00	0.00
	EBIT
2.74B	3.21B	41.06B	42.02B	57.58B	43.19B
	EBITDA
2.56B	0.00	40.99B	42.13B	57.78B	43.64B
	Net Income Common Stockholders
2.30B	2.73B	2.49B	-1.65B	8.87B	-374.00M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
343.20B	66.39B	19.42B	324.97B	391.93B	434.41B
	Total Assets
725.82B	735.59B	721.12B	689.92B	937.58B	940.72B
	Total Debt
21.09B	21.57B	20.87B	21.06B	19.62B	20.95B
	Net Debt
2.35B	3.07B	1.46B	3.81B	6.73B	7.25B
	Total Liabilities
696.41B	705.46B	691.34B	672.71B	874.97B	872.51B
	Stockholders Equity
27.21B	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: Negative
• Last Price: 101.92
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For PRU, the sentiment is Negative. The current price of 101.92 is below the 20-day moving average (MA) of 103.15, below the 50-day MA of 103.72, and below the 200-day MA of 112.49, indicating a bearish trend. The MACD of 0.27 indicates Positive momentum. The RSI at 46.28 is Neutral, neither overbought nor oversold. The STOCH value of 12.43 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative 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	$51.83B	12.57	16.08%	2.82%	8.77%	110.90%
UNM	79 Outperform	$13.93B	9.42	14.68%	2.10%	1.69%	25.54%
GL	74 Outperform	$9.86B	9.72	20.47%	0.83%	5.41%	16.60%
PUK	72 Outperform	$29.03B	13.33	12.82%	2.06%	-14.78%	34.80%
PRU	71 Outperform	$36.08B	16.13	8.04%	5.15%	2.47%	6.88%
Sector *	64 Neutral	$12.67B	9.74	7.58%	17015.08%	12.21%	-6.96%
AFL	64 Neutral	$55.43B	16.00	14.41%	2.03%	-12.66%	-29.30%

Prudential Financial Corporate Events

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.

Spark’s Take on PRU Stock

According to Spark, TipRanks’ AI Analyst, PRU is a Neutral.

Prudential Financial presents a mixed picture with strong cash flow and valuation attractiveness but faces significant challenges in financial stability due to high leverage and negative equity. While technical indicators are bearish, earnings call insights and corporate events suggest strategic growth and solid shareholder returns. The company needs to address underlying financial concerns to improve its overall standing.

To see Spark’s full report on PRU stock, click here.

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.

Spark’s Take on PRU Stock

According to Spark, TipRanks’ AI Analyst, PRU is a Neutral.

Prudential Financial presents a mixed picture with strong cash flow and valuation attractiveness but faces significant challenges in financial stability due to high leverage and negative equity. While technical indicators are bearish, earnings call insights and corporate events suggest strategic growth and solid shareholder returns. The company needs to address underlying financial concerns to improve its overall standing.

To see Spark’s full report on PRU stock, click here.

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.

Spark’s Take on PRU Stock

According to Spark, TipRanks’ AI Analyst, PRU is a Neutral.

Prudential Financial’s mixed financial performance, marked by strong revenue growth but concerning balance sheet leverage, is the primary factor influencing the score. The technical analysis suggests a bearish trend, while valuation is reasonable with a high dividend yield. Earnings call insights highlight both strategic growth and ongoing challenges.

To see Spark’s full report on PRU stock, click here.

Prudential Financial Board Member Kathleen Murphy Steps Down

On February 28, 2025, Kathleen A. Murphy announced her decision not to seek reelection to Prudential Financial’s Board of Directors at the upcoming annual meeting on May 13, 2025. Her resignation is attributed to other professional commitments and is not due to any disagreements with the company’s operations or policies.

Prudential Financial Announces Leadership Changes in 2025

Douglas A. Scovanner will not seek reelection to Prudential Financial’s Board of Directors at the shareholder meeting on May 13, 2025, after serving for over 11 years, departing for personal reasons without any disagreements with the company. Additionally, Robert Boyle has been appointed as Senior Vice President, Controller, and Principal Accounting Officer effective April 7, 2025, succeeding Robert Axel, with a new compensation package reflecting his elevated role.

Prudential Financial Unveils 2025 Incentive Programs

Prudential Financial has announced its 2025 Annual and Long-Term Incentive Programs for executive officers, applicable to awards in 2025 relating to 2024 performance. These programs form part of the company’s ongoing efforts to align executive compensation with performance goals and long-term strategic objectives, potentially impacting the company’s operational focus and stakeholder interests.