Prudential Financial, Inc. (PRU) shares have surged 35.1% over the past year, outpacing the industry’s growth of 24.2%. The Finance sector and the Zacks S&P 500 composite have reported returns of 21.2% and 23%, respectively, in the same period.
With a market capitalization of $45.43 billion, the average volume of shares traded in the last three months was 1.37 million. The rally in Prudential Financial’s stock was largely driven by the growing pension risk transfer (PRT) market, higher earnings from emerging markets, expanding distribution, product offerings, improved spread income, strategic acquisitions, and a solid financial position. Prudential Financial has a VGM Score of A, indicating its attractiveness in value, growth, and momentum.
The Zacks Consensus Estimate for Prudential Financial’s 2024 earnings per share indicates a year-over-year increase of 15.2%, with revenues pegged at $63 billion, implying a year-over-year improvement of 23.7%. For 2025, the consensus estimate for earnings per share suggests an 8.4% increase from the 2024 estimate. Prudential Financial has a Growth Score of B, reflecting its strong growth prospects.
The expected long-term earnings growth rate is 9.7%. Internationally, Prudential Financial is anticipated to benefit from increased spread income, elevated interest rates, favorable variable investment income, and higher joint venture earnings, particularly highlighted by its performance in Chile.
Prudential growth outpaces industry المنافسة
In the U.S., the company is projected to gain from higher spread income due to business growth and more favorable underwriting results. Prudential Financial has solidified its position in the PRT market, assisting companies in mitigating risks related to pension liabilities. The company recently announced a PRT transaction with Verizon Communications Inc., which is a positive development for its Retirement Strategies business.
The insurer continues to invest in partnerships to expand in emerging markets, undertaking strategic initiatives that position it well for long-term growth. Prudential Financial has been increasing its dividend for the past 15 years, and the board authorized a 4% dividend increase in the first quarter of 2024, marking the 16th consecutive annual hike. The company maintains a sturdy balance sheet with cash and liquid assets between $3 billion and $5 billion, supporting its capital deployment and AA financial strength rating.
Despite its strengths, Prudential Financial faces challenges, including declining net margins in recent years. Increased expenses due to higher policyholders’ benefits, interest credited to policyholders’ account balances, dividends to policyholders, and higher administrative costs have impacted profitability. The company must work to improve revenues to prevent further erosion of margins.
Prudential Financial has demonstrated robust growth and strong financial performance, driven by strategic initiatives and market expansion. However, it must address increasing expenses and net margin pressure to maintain its upward trajectory and sustain long-term growth.
