Prudential Financial 'Ready To Rock,' Analyst Upgrades To Strong Buy

Raymond James analyst Wilma Burdis upgraded coverage on Prudential Financial Inc PRU to Strong Buy from Market Perform with a price target of $125.

The analyst expects the company's 2024 repurchases to exceed $2 billion (vs. a prior estimate of $1.05 billion) and sees a dividend yield of ~5% attractive, thanks to favorable capital position. 

The analyst estimates a pro forma highly liquid asset position of $6.2 billion (vs. targeted buffer of $3 billion-$5 billion), including the holding company's highly liquid assets of $4.5 billion as of Q2 FY23 and about $1.1 billion of proceeds from two recently announced deals and assuming $1.3 billion of IMR capital relief.  

Burdis also sees a potential to further divest non-core operations and less appetite for mergers & acquisitions. 

The analyst raised operating EPS estimates to $11.77 (from $11.62) vs. consensus of $11.92 for FY23, $13.58 (from $13.34) vs. $13.24 estimate for FY24, and $14.79 (from $14.08) vs. street view of $14.01 for FY25. 

Price Action: PRU shares are trading higher by 2.09% at $93.34 on the last check Thursday.