Prudential Financial price target lowered to $108 by Piper Sandler

Investing.com - Piper Sandler lowered its price target on Prudential Financial (NYSE:PRU) to $108.00 from $109.00 on Wednesday, while maintaining a Neutral rating on the stock. The insurance giant, currently trading at $102.98 with a market capitalization of $36.46 billion, shows mixed signals according to InvestingPro data, with 8 analysts recently revising earnings estimates downward.

The adjustment follows Prudential (LON:PRU)’s pre-announcement of several second-quarter 2025 metrics that suggest lower earnings power. Variable investment income was reported at $55-$75 million, approximately $0.14 below plan at the mid-point, though improved from approximately $90 million below plan in the first quarter of 2025. Despite these challenges, InvestingPro analysis suggests the stock is currently trading below its Fair Value, with a robust dividend yield of 5.24%.

PGIM assets under management reached $1.44 trillion, modestly higher than Piper Sandler’s estimate of $1.38 trillion and the first quarter’s $1.38 trillion. Other related revenues, net, were approximately $50 million, which includes incentive fees, transaction fees, and revenues from seed and co-investments and mortgage originations, improved by approximately $0.07 from the first quarter’s level of $19 million.

Prudential’s annual actuarial review revealed a one-time impact of $50 million (approximately $0.14) with a quarterly ongoing impact of $20 million (approximately $0.06) seen in Individual Retirement Strategies, specifically in fixed annuities.

The research firm believes the actuarial review will be the focus of the pre-announcement, characterizing the variable investment income situation as an incremental negative, closer to MetLife (NYSE:MET)’s pre-announcement and less like Apollo’s and Voya’s. Notably, Prudential has maintained its position as a dividend aristocrat, having raised dividends for 16 consecutive years, according to InvestingPro data, which offers additional insights through its comprehensive Pro Research Report.

In other recent news, Prudential Financial’s investment arm has agreed to purchase up to $500 million in consumer loans from Affirm Holdings (NASDAQ:AFRM) over a three-year period. This deal includes provisions allowing Affirm to re-lend the investment, potentially financing up to $3 billion of buy-now-pay-later loans. This agreement marks Prudential’s second significant transaction with Affirm in recent months. Additionally, Prudential Financial held its Annual Meeting of Shareholders, where the election of the Board of Directors and the approval of the company’s independent auditor were confirmed. Shareholders also endorsed executive compensation but rejected a proposal for an independent board chairman.

Analyst activity surrounding Prudential includes Evercore ISI reducing its stock price target from $134 to $123, citing current equity market performance and Prudential’s earnings per share (EPS) adjustments. Meanwhile, CFRA downgraded Prudential’s stock rating from Buy to Hold, slashing the price target to $110. CFRA based this decision on a mixed financial performance, noting a significant decline in operating revenues despite an increase in first-quarter EPS. The company’s U.S. Businesses unit saw profit growth, but this was offset by declines in other areas. Prudential’s ongoing realignment efforts and challenging macroeconomic conditions were highlighted as factors influencing these analyst assessments.

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