UPDATE: Bank of America Downgrades Prudential Financial to Neutral, Raises PT Following Strong 1Q Results, Valuation

In a report published Monday, Bank of America analyst Seth Weiss downgraded the rating on Prudential Financial

from Buy to Neutral, but raised the price target from $64.00 to $69.00. In the report, Weiss noted, “We are raising our Price Objective from $64 to $69 following PRU's strong 1Q results, but downgrading to Neutral after the stock's recent run-up. PRU is up 22% on the ytd, and up 10% since reporting 1Q results, compared to a 3% increase in the overall market and a 5% increase in S&P life stocks. PRU now trades at 1.1x adjusted BV; this is up from 0.9x at the end of 2012, and is at its highest valuation since early 2011. We believe this valuation is appropriate, given PRU's progress on its ROE, but we see pressure to further multiple expansion. We estimate that since 2011 PRU has deployed $2.7B in M&A and major pension risk transfers, and $3.3B in dividends and share repurchase. 1Q results suggest that both the Hartford life acquisition and the two major pension transfer solutions are generating a 13-14% ROE (before the positive impact of expense saves), in line with management's expectations. Capital deployment is the primary force that has driven the normalized ROE up over 200 basis points the last two years.” Prudential Financial closed on Friday at $65.05.