PFG Faces Challenges as Market Trajectory Diverges
Performance Lags, While Analysts Adjust Expectations
Principal Financial Group, Inc. (PFG), headquartered in Des Moines, Iowa, stands as a notable global financial services firm. The company focuses on retirement solutions, insurance, and asset management, catering to a wide array of clients, including individuals, businesses, and institutions worldwide. Currently valued at a market capitalization of $20 billion, PFG aims to assist clients in reaching their financial aspirations by leveraging innovation and expertise in its diverse product offerings.
Despite its ambitions, shares of PFG have fallen behind the broader financial market in the past year. The stock has seen a gain of 21.1%, while the S&P 500 Index has climbed nearly 31.8%. The disparity continues in 2024, with PFG up 10.9% year-to-date compared to a 25.8% increase for the S&P 500.
When closely examining performance, PFG has also underperformed the iShares U.S. Financials ETF (IYF), which has surged about 50% in the past year and 39.3% year-to-date.
After the release of its third-quarter earnings on Oct. 24, PFG experienced a 6.6% drop in share price. The earnings report did not meet market expectations, affecting both revenue and profits.
For the fiscal year ending in December, analysts project PFG’s earnings per share (EPS) to rise by 7.5% year-over-year to $7.04 on a diluted basis. However, PFG’s earnings surprise history shows a mixed performance, missing estimates in three of the last four quarters while surpassing expectations once.
Among the 14 analysts monitoring PFG stock, the consensus rating stands at “Hold.” This reflects one “Strong Buy” rating, 11 “Holds,” and two “Strong Sells.”
This consensus has remained steady over the previous months.
On Nov. 19, RBC Capital analyst Mark Dwelle updated the price target for Principal Financial, increasing it to $91 from $87 while maintaining a “Sector-Perform” rating. After the company’s Investor Day, Dwelle highlighted insights into PFG’s strategies, market advantages, and areas of focus, emphasizing capital return as a major priority.
The average price target stands at $88.38, indicating a slight premium of 1.3% from PFG’s current trading levels. Meanwhile, the highest target from analysts reaches $99, suggesting a potential upside of 13.4%.
On the date of publication, Kritika Sarmah did not hold (either directly or indirectly) positions in any of the mentioned securities. All information and data are provided solely for informational purposes. For more detailed information, please view the Barchart Disclosure Policy here.
The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.
