UPDATE: Sterne Agee Downgrades Principal Financial Group to Neutral on Risk/Reward

Sterne Agee downgraded Principal Financial Group

from Buy to Neutral and reduced its price target to $33. Sterne Agee noted, "We are downgrading PFG to Neutral from Buy as we view the relative upside/downside in the shares as similar. On a relative basis we simply see better opportunities in other Buy-rated names. … Unfortunately, the upside from better organic growth has been offset by continued degradation of margins (or especially in the case of Principal Global Investors, less margin expansion than expected). In addition, the upside to capital deployment, primarily reflecting the recent acquisition of a leading Chilean pension company, Cuprum, has not generated the kind of EPS and ROE accretion we expected." Principal Financial Group closed at $29.17 on Monday.