UPDATE: Morgan Stanley Reiterates on Prudential Financial as Outlook Remains Solid

In a report published Thursday, Morgan Stanley analyst Nigel Dally reiterated an Overweight rating on Prudential Financial PRU, but lowered the price target from $102.00 to $100.00. In the report, Morgan Stanley noted, “We view Prudential as an attractive growth and ROE expansion story due to a combination of its superior business mix, deal‐related synergies, and ongoing capital management. These factors were again evident in the divisional results, which ran well ahead of expectations, most notably in retirement and asset management, both of which we consider to be higher multiple businesses. While international was a partial offset due to a larger than expected impact of seasonality, the real source of disappointment for the quarter though was corporate losses, which spiked 31% from the prior year. However, this appears due to the confluence of a range of various items including true‐ups to employee benefits, contribution to the Prudential Foundation, and a range of other items. Accordingly, given the strength in divisional results and expectations for a more normalized level of corporate losses going forward, we believe the fundamental outlook for the company remains solid. At the stock's current valuation, we continue to see solid upside potential.” Prudential Financial closed on Wednesday at $82.72.
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Posted In: Analyst ColorPrice TargetAnalyst RatingsMorgan StanleyNigel Dally
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