Principal Financial Group Reports Mixed Results Amid Market Challenges
Based in Des Moines, Iowa, Principal Financial Group, Inc. (PFG) stands as a prominent player in the global financial services industry. Specializing in retirement, insurance, and asset management solutions, the firm has a market capitalization of $18.8 billion and serves millions of customers worldwide. Its extensive product offerings aim to empower individuals and businesses to achieve financial security.
As a “large-cap stock,” PFG is categorized among companies valued over $10 billion. This classification underscores its influential role in the financial sector, supported by its focus on delivering comprehensive solutions and cultivating long-term growth.
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PFG reached a two-year high of $91.97 on October 17, 2024, and is currently trading 7.3% below that peak. Notably, in the past three months, PFG has gained 9.6%, surpassing the Financial Select Sector SPDR Fund (XLF), which posted gains of 2.4% during the same period.
Despite this recent uptick, PFG has lagged behind the broader financial sector in the long term. Over the past six months, PFG’s stock dipped by 5 basis points and only increased by 2.1% over the last 52 weeks, contrasting sharply with XLF’s 11.3% rise over six months and 21.1% increase over the past year.
To further validate its recent positive trend, PFG has shown a significant rise in stock prices since late December 2024. The stock has mostly traded above its 50-day and 200-day moving averages since mid-January, despite experiencing some fluctuations along the way.
Following the release of mixed Q4 results on February 6, PFG stock jumped 2.9%. Revenues for the quarter soared 76.6% year-over-year to approximately $4.8 billion, buoyed by a favorable adjustment in the fair value of funds withheld embedded derivatives. However, the adjusted operating income per share only grew by 6% year-over-year to $1.94, which fell short of consensus estimates by 51 basis points.
Additionally, while the company has seen notable inflows in assets under management (AUM) in recent quarters, it has also faced significant outflows, resulting in a net decline in AUM over the past five quarters. The overall growth in AUM was primarily driven by solid performance in the securities market. Yet, as the equity market faced headwinds, PFG’s AUM decreased 3.8% quarter-on-quarter to $712.1 million as of December 2024.
Positive news for PFG includes its performance relative to T. Rowe Price Group, Inc. (TROW), which saw a 12.3% decline over the past six months and a 19.1% drop over the last year.
Despite these comparisons, analysts remain cautious about PFG’s stock outlook. Among the 16 analysts monitoring PFG, the consensus recommendation is a “Hold.” The average price target stands at $86.67, indicating a modest 1.7% premium compared to current pricing levels.
As of the publication date, Aditya Sarawgi did not hold any positions in the securities mentioned. All information provided is for informational purposes. For more details, please view the Barchart Disclosure Policy here.
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