Update shared on08 Oct 2025
Fair value Increased 1.36%Analysts have raised their price target for Principal Financial Group to approximately $87.17 from $86. This modest increase reflects improving variable investment income, strong distribution, and sustained fee tailwinds despite ongoing flow challenges.
Analyst Commentary
Recent analyst commentary has highlighted both positive catalysts and ongoing hurdles for Principal Financial Group, informing the current consensus on valuation and future performance.
Bullish Takeaways
- Bullish analysts have raised price targets, reflecting confidence in near-term and long-term upside potential.
- Variable investment income continues to normalize and is contributing tailwinds to the company's earnings, supporting growth optimism.
- Fee revenues are benefiting from increased fee and trading days as well as positive equity market movements. This could bolster profitability.
- Favorable claims experience is seen as an encouraging indicator for actuarial review season and prospective earnings growth. This underpins robust financial execution.
- Strong distribution channels are supporting consistent performance across product lines and providing resilience despite external flow challenges.
Bearish Takeaways
- Bearish analysts remain cautious about ongoing secular flow headwinds, which may weigh on net new business and limit sustained growth in certain segments.
- Some view the upside from variable investment income and fee tailwinds as already acknowledged by the market, suggesting limited scope for positive surprise.
- Despite modest beats in recent quarters, valuation gains may be tempered by persistent industry challenges and competition, especially for underweight-rated outlooks.
What's in the News
- Piper Sandler raised Principal Financial's price target to $94 from $92 and reiterated an Overweight rating, citing ongoing tailwinds from variable investment income and strong claims experience (Piper Sandler).
- UBS increased its price target to $87 from $85 after Principal Financial reported a modest core beat in Q2; the firm maintains a Neutral rating (UBS).
- Principal Financial repurchased 1,979,514 shares totaling approximately $150.35 million in the recent quarter. This represents 0.88% of shares and completes a buyback tranche announced earlier this year.
- The company announced a third quarter cash dividend of $0.78 per share, payable on September 26, 2025, to shareholders of record as of September 4, 2025.
- Principal successfully transitioned administration of its largest Pooled Employer Plan, Principal® EASE, to FuturePlan. The move aims to optimize service and customer experience for thousands of plan participants.
Valuation Changes
- Consensus Analyst Price Target has risen slightly to $87.17, up from $86.
- Discount Rate has decreased marginally to 6.78%, down from 6.79% previously.
- Revenue Growth expectations have increased, with projections now at 7.71% compared to 7.47% prior.
- Net Profit Margin is slightly lower at 11.34%, compared to 11.56% earlier.
- Future P/E ratio has climbed modestly to 10.15x from the previous estimate of 9.89x.
Disclaimer
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