JP Morgan Remains Bullish On Prudential Following Solid Earnings

1Q11 results affirm JP Morgan;s bullish stance on Prudential PRU. EPS was in-line with JPM's estimate, and business fundamentals were better than expected. JP Morgan expects strong momentum in sales/flows to drive growth and boost returns. Prudential reported 1Q11 EPS of $1.69 versus JP Morgan's $1.44 estimate and consensus of $1.48. Excluding several unusual items and Japan disaster related claims, JP Morgan estimates that PRU would have earned $1.47. The company reported robust sales in most businesses, including variable annuities, institutional, asset management, group insurance, Pru of Japan, and Gibraltar. Overall margins were relatively healthy. JP Morgan forecasts PRU to generate robust growth in its VA and asset management businesses as a result of robust net flows and the rising equity market. Foreign life earnings should also grow at a healthy pace given strong sales at Gibraltar and Pru of Japan and accretion from Star/Edison. Prudential remains JP Morgan's top pick. It expects the company's returns to steadily improve over the next few years, driven by strong organic growth, capital deployment, and accretion from the Star/Edison acquisition. JP Morgan has a $72 PT and Overweight rating on PRU PRU closed Wednesday at $62.43