The company reiterated its long-term ROE (Return on Equity) goal of 13% to 14%, and this strong result should be achievable driven by its diversified business mix including Japan, according to the analyst note.
"Prudential Financial is our top pick in life insurance based on a strong return profile, attractive business, mix, attractive ROE profile, and among the cheapest P/E valuations in the life insurance sector," Barclays analysts said.
Prudential, the second-largest U.S. life insurer, has agreed in recent years to take on pension obligations from large employers such as General Motors (GM) and Verizon Communications (VZ), according to Bloomberg.
Prudential Financial is a financial services company that provides financial products and services including life insurance, annuities, retirement-related services, mutual funds and investment management.
Separately, TheStreet Ratings team rates PRUDENTIAL FINANCIAL INC as a Buy with a ratings score of A-. TheStreet Ratings Team has this to say about their recommendation:
"We rate PRUDENTIAL FINANCIAL INC (PRU) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its robust revenue growth, impressive record of earnings per share growth, compelling growth in net income, expanding profit margins and good cash flow from operations. We feel its strengths outweigh the fact that the company has had lackluster performance in the stock itself."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth greatly exceeded the industry average of 9.4%. Since the same quarter one year prior, revenues rose by 21.0%. Growth in the company's revenue appears to have helped boost the earnings per share.
- PRUDENTIAL FINANCIAL 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, PRUDENTIAL FINANCIAL INC turned its bottom line around by earning $3.08 versus -$1.61 in the prior year. This year, the market expects an improvement in earnings ($10.15 versus $3.08).
- 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 64.5% when compared to the same quarter one year prior, rising from $1,238.00 million to $2,036.00 million.
- 35.43% is the gross profit margin for PRUDENTIAL FINANCIAL INC which we consider to be strong. It has increased from the same quarter the previous year. Along with this, the net profit margin of 13.09% is above that of the industry average.
- Net operating cash flow has significantly increased by 179.33% to $5,528.00 million when compared to the same quarter last year. In addition, PRUDENTIAL FINANCIAL INC has also vastly surpassed the industry average cash flow growth rate of 21.99%.
- You can view the full analysis from the report here: PRU Ratings Report