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Principal Financial's Growth Expectations Forecast


Deutsche Bank has published a research report on Principal Financial Group (NYSE: PFG) after the company hosted management meetings showing ways to access growth.

In the report, Deutsche Bank writes "During our recent meetings with management and investors, Principal highlighted its strong potential for growth in its US and international asset accumulation and asset management businesses. No other company in our life insurance universe offers a better way to gain exposure to these markets than Principal. Management expects the following growth rates: 10-12% for US Asset Accumulation (based on 8% capital markets growth; 2-3% productivity and job growth; 2% operational efficiency), 15% for Global Asset Management, 15-20% for International, and mid to high single-digit for Insurance. The company has the following ROE expectations over time: 30-32% for Full Service Accumulation, 30-50% for Global Asset Management, 30-35% for Mutual Funds, 20-25% for International, 12-13% for Life, and 13-15% for Specialty Benefits. Management thinks the company's overall ROE can reach the high teens."

Deutsche Bank maintains its Hold rating and $29 price target.

Principal Financial Group closed Friday at $28.81.


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