Update (9;45 a.m.): Updated with Monday market open information.
NEW YORK (TheStreet) -- Morgan Stanley added Prudential Financial (PRU) to its Best Ideas list and set a $101 price target. The firm noted the company's fundamentals are substantially stronger than consensus expectations.
The stock was up 0.54% to $80.03 at 9:44 a.m. on Monday.
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Separately, TheStreet Ratings team rates PRUDENTIAL FINANCIAL INC as a "hold" with a ratings score of C+. TheStreet Ratings Team has this to say about their recommendation:
"We rate PRUDENTIAL FINANCIAL INC (PRU) a HOLD. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its revenue growth, compelling growth in net income and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including generally higher debt management risk and poor profit margins."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth came in higher than the industry average of 8.1%. Since the same quarter one year prior, revenues rose by 26.4%. Growth in the company's revenue appears to have helped boost the earnings per share.
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Insurance industry. The net income increased by 271.9% when compared to the same quarter one year prior, rising from -$720.00 million to $1,238.00 million.
- Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period. Although other factors naturally played a role, the company's strong earnings growth was key. Looking ahead, the stock's rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry, implying reduced upside potential.
- The gross profit margin for PRUDENTIAL FINANCIAL INC is currently lower than what is desirable, coming in at 34.36%. Despite the low profit margin, it has increased significantly from the same period last year. Despite the mixed results of the gross profit margin, PRU's net profit margin of 9.63% compares favorably to the industry average.
- The debt-to-equity ratio of 1.02 is relatively high when compared with the industry average, suggesting a need for better debt level management.
- You can view the full analysis from the report here: PRU Ratings Report