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TheStreet Ratings Top 10 Rating Changes

Rating Change #7

Prudential Financial Inc (PRU) has been downgraded by TheStreet Ratings from buy to hold. Among the primary strengths of the company is its reasonable valuation levels, considering its current price compared to earnings, book value and other measures. At the same time, however, we also find weaknesses including deteriorating net income, generally poor debt management and disappointing return on equity.

Highlights from the ratings report include:

  • PRU, with its decline in revenue, underperformed when compared the industry average of 13.1%. Since the same quarter one year prior, revenues slightly dropped by 5.3%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • PRUDENTIAL FINANCIAL INC has exprienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, PRUDENTIAL FINANCIAL INC increased its bottom line by earning $7.04 versus $5.69 in the prior year. For the next year, the market is expecting a contraction of 7.0% in earnings ($6.55 versus $7.04).
  • The debt-to-equity ratio of 1.01 is relatively high when compared with the industry average, suggesting a need for better debt level management.
  • The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. When compared to other companies in the Insurance industry and the overall market, PRUDENTIAL FINANCIAL INC's return on equity is below that of both the industry average and the S&P 500.

Prudential Financial, Inc., through its subsidiaries, provides various financial products and services, including life insurance, annuities, retirement-related services, mutual funds, and investment management services in the United States, Asia, Europe, and Latin America. The company has a P/E ratio of 12.1, equal to the average insurance industry P/E ratio and below the S&P 500 P/E ratio of 17.7. Prudential Financial has a market cap of $22.36 billion and is part of the financial sector and insurance industry. Shares are down 6.9% year to date as of the close of trading on Thursday.

You can view the full Prudential Financial Ratings Report or get investment ideas from our investment research center.

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