How Will Principal Financial (PFG) Stock Respond to This Upgrade?

NEW YORK (TheStreet) -- Shares of Principal Financial Group Inc.  (PFG) are up 2.00% to $49.86 in pre-market trade after Morgan Stanley (MS) upgraded the company to "equalweight" from "underweight" 

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Separately, TheStreet Ratings team rates PRINCIPAL FINANCIAL GRP INC as a Buy with a ratings score of B+. TheStreet Ratings Team has this to say about their recommendation:

"We rate PRINCIPAL FINANCIAL GRP INC (PFG) a BUY. This is driven by multiple strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, solid stock price performance, impressive record of earnings per share growth and compelling growth in net income. We feel these strengths outweigh the fact that the company shows weak operating cash flow."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • PFG's revenue growth has slightly outpaced the industry average of 7.7%. Since the same quarter one year prior, revenues rose by 14.4%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • Although PFG's debt-to-equity ratio of 0.27 is very low, it is currently higher than that of the industry average.
  • Powered by its strong earnings growth of 55.73% and other important driving factors, this stock has surged by 29.34% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, although almost any stock can fall in a broad market decline, PFG should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • PRINCIPAL FINANCIAL GRP INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, PRINCIPAL FINANCIAL GRP INC increased its bottom line by earning $2.96 versus $2.60 in the prior year. This year, the market expects an improvement in earnings ($4.09 versus $2.96).
  • 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 61.9% when compared to the same quarter one year prior, rising from $186.50 million to $301.90 million.You can view the full analysis from the report here: PFG Ratings Report

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