Credit Suisse Reports on Prudential Financial

In a report released Thursday, Credit Suisse commented on Prudential Financial PRU. In the report, Credit Suisse was positive in its assessment of the company. Credit Suisse writes, "In a new report published today: "Auto-Rebalancing the VA (Variable Annuity) Industry", we look at the impact of products that contain a risk management feature designed to limit tail risk, similar to PRU's signature auto rebalance feature. We conclude that this innovation could be quite positive for the industry as it should lower capital and economic volatility, allowing major players to free up excess capital. Because PRU has had strong sales momentum, products with this auto rebalance feature now account for $65B of its $110B of VA AUM and an even larger percent of its products with living benefit guarantees (about 80%). Estimates/Growth potential: Following another strong quarterly report at the start of May (driven by strong top line growth, fee-based earnings from annuities, retirement and asset management), we raised our 2011/2012 estimates to $6.70/$7.70 from $6.66/$7.56. We see an acceleration in book value per share growth from 8% in 2011 to 13% in 2012." Credit Suisse currently has an Outperform rating on Prudential and a price target of $75. Shares of PRU closed at $62.20 Thursday, up from $61.33 at the opening bell.