Why Prudential Financial, Inc. (PRU) Is The Stock Your Portfolio Needs?

Prudential Financial, Inc. (NYSE:PRU) reaches $36.35B market cap as shares retreated -2.06% in recent session. It closed at $87.34, after slipping as low as $84.51 through the day. The shares were pushed to an intraday high Thursday at $88.51. Trading activity significantly improved as the volume at ready counter increased to 4,800,504 shares versus 2,497,780 in average daily trading volume over the past 20 days. So far this year, the volume has averaged about 2,094,527 shares. The stock is now -1.29% above against its bear-market low of $88.48 on December 06, 2018. It has retreated -45.57% since it’s 52-week high of $127.14 reached in January. Now the market price is down -24.39% on the year and down -24.04% YTD.

PRU’s 50 day simple moving average (SMA 50) price is $96.06 and its 200-day simple moving average (SMA 200) price is $99.77. The company’s stock currently has a total float of 412.17M shares. Its weekly volatility is hovering around 3.5% and felt 2.62% volatility in price over a month. On the upside, the share price will test short term resistance at around $89.06. On a downside, the stock is likely to find some support, which begins at $85.06. The failure to get near-term support could push it to $82.79.

Separately, it has been reported that multiple insider activity took place at Prudential Financial, Inc. (PRU). Executive Vice President Pelletier Stephen sold 40,729 shares for $9,114 in transaction occurred on 2018/02/21. After making this transaction, the Executive Vice President owns a direct stake of 4,429,279 shares, worth $796,017, as per the last closing price. On 2018/01/02 Koster Barbara, Senior Vice President at PRU, dumped 16,801 shares at an average price of $115.17 per share. The selling total is valued at $1,793,352.

EVP and General Counsel, Harris Timothy P had divested 10,527 shares for $21,327 through a trade on 2017/11/29. Following this activity, the insider holds 1,210,605 shares worth $1,862,700 as of recent close. Wall Street’s most bullish Prudential Financial, Inc. (NYSE:PRU) analysts are predicting the share price to blow past $135 per share during the next 12 months. The current median share price forecast by them is $119, suggesting that the stock could increase 36.25% in that time frame. The average price target of $118.06 calls for a nearly 35.17% increase in the stock price.

It had seen a positive analyst call from Goldman, which upgraded the stock from Neutral to Buy on June 04. Analysts at Credit Suisse, started covering the stock on April 25 with a Neutral rating. The stock won favor of RBC Capital Mkts analysts who expressed their confidence in it using an upgrade from Sector Perform to Outperform on February 12. Atlantic Equities analysts came out with bullish views on January 11 when the call was made. They think the stock is now Overweight compared to to their prior call for Neutral.

When looking at valuations, Prudential Financial, Inc. (PRU) has a cheap P/E of 9.58x as compared to industry average of 13.42x. Moreover, it trades for 6.73 times the next 12 months of expected earnings. Also, it is trading at rather inexpensive levels at just over 0.78x price/book and 0.59x price/sales. Compared to others, Prudential Financial, Inc. is in a different league with regards to profitability, having net margins of 11.3%. To put some perspective around this, the industry’s average net margin is 5.95%. PRU’s ROE is 13.8%, which is also considerably better than the industry’s ROE of 6.76%.

Shares of Prudential Financial, Inc. (PRU) have dropped -11.4% since the company’s last earnings report. Over the past 9 fiscal quarters, Prudential Financial, Inc. (NYSE:PRU) has topped consensus earnings estimates in 7 quarters (58%), missed earnings in 2 quarters (16%), whereas at 0 occasion EPS met analyst expectations. PRU last reported earnings on November 07, 2018 when it released Sep-18 results that receded expectations. The company raked in $3.15 per share, 950% change on the same period last year. That was worse than consensus for $3.16. Revenue for the recent quarter stood at $14.43 billion, up 8% on last year and above the $13.58 billion predicted by analysts. For this quarter, Wall Street analysts forecast revenue in a range of $12.74 billion to $15.7 billion, which should be compared with $13.04 billion generated last year. EPS is seen in a range of $2.82 to $3, against the $2.72 reported a year ago.