UPDATE: Deutsche Bank Initiates Principal Financial Group at Hold on ROE Visibility

Deutsche Bank initiated coverage on Principal Financial Group

with a Hold rating and a $31 price target. Deutsche Bank noted, "Investors have grown frustrated at Principal's inability to translate AUM growth, increased focus on fee-for-service business and aggressive capital deployment into ROE improvement. This is further exacerbated by modest guidance of 50-80 bps improvement per year in ROE, to a 13-15% target by 2017. We find it difficult to see enough market improvement over the next 12 months that would justify an even greater premium spread to the group, especially as we expect the strong capital deployment of the last two years to slow." Principal Financial Group closed at $29.07 on Tuesday.