Principal Financial Group (PFG) Cut to “Hold” at Zacks Investment Research

Principal Financial Group (NYSE:PFG) was downgraded by Zacks Investment Research from a “buy” rating to a “hold” rating in a research note issued on Monday.

According to Zacks, “Focus on fee-based revenue sources has been helping Principal Financial to earn steadily and limits exposure to the interest rate environment. The company targets a return on equity improvement of 30-60 basis points annually. Its inorganic story remains impressive with buyouts strengthening international footprint. The company’s assets under management have also been steadily increasing. It also remains focused on effective capital deployment to enhance the shareholder value, targeting $0.9-$1.3 billion in 2018. Estimates also moved up for 2018. However, higher leverage inducing increase in interest weigh on margin expansion remains a headwind. Shares of Principal Financial have underperformed the industry in a year. The company is set to report fourth-quarter results on Jan 29. A Zacks Rank of 3, which increases the predictive power of ESP, combined with an Earnings ESP of 0.00% makes surprise prediction difficult.”

A number of other equities research analysts have also weighed in on PFG. Wells Fargo & Co reiterated a “market perform” rating and set a $76.00 target price on shares of Principal Financial Group in a research note on Monday, January 8th. Goldman Sachs Group upgraded Principal Financial Group from a “neutral” rating to a “buy” rating in a research note on Tuesday, January 9th. Keefe, Bruyette & Woods restated a “hold” rating and issued a $73.00 price objective on shares of Principal Financial Group in a research note on Monday, December 11th. Finally, Morgan Stanley upped their price objective on Principal Financial Group from $67.00 to $72.00 and gave the stock an “equal weight” rating in a research note on Thursday, October 5th. Two equities research analysts have rated the stock with a sell rating, seven have given a hold rating and two have given a buy rating to the company. The company has a consensus rating of “Hold” and an average target price of $68.90.

Shares of Principal Financial Group (PFG) traded down $0.08 on Monday, reaching $73.97. 915,928 shares of the company’s stock were exchanged, compared to its average volume of 1,020,000. The stock has a market cap of $21,290.00, a price-to-earnings ratio of 12.13, a PEG ratio of 1.35 and a beta of 1.72. The company has a debt-to-equity ratio of 0.26, a quick ratio of 0.10 and a current ratio of 0.10. Principal Financial Group has a 1-year low of $56.12 and a 1-year high of $74.80.

Principal Financial Group (NYSE:PFG) last announced its earnings results on Thursday, October 26th. The financial services provider reported $1.28 earnings per share for the quarter, missing analysts’ consensus estimates of $1.30 by ($0.02). The company had revenue of $3.95 billion for the quarter, compared to analysts’ expectations of $3.12 billion. Principal Financial Group had a net margin of 12.35% and a return on equity of 13.55%. During the same quarter in the prior year, the firm posted $1.15 earnings per share. research analysts expect that Principal Financial Group will post 5.22 earnings per share for the current fiscal year.

In related news, CFO Deanna D. Strable-Soethout sold 18,905 shares of the company’s stock in a transaction on Tuesday, November 28th. The shares were sold at an average price of $70.07, for a total value of $1,324,673.35. The sale was disclosed in a filing with the Securities & Exchange Commission, which is available at this link. Also, Chairman Daniel Joseph Houston sold 69,894 shares of the company’s stock in a transaction on Friday, January 5th. The stock was sold at an average price of $72.01, for a total transaction of $5,033,066.94. The disclosure for this sale can be found here. Insiders sold a total of 301,958 shares of company stock valued at $21,343,156 over the last 90 days. 1.50% of the stock is currently owned by company insiders.

A number of institutional investors have recently modified their holdings of the stock. Janus Henderson Group PLC boosted its holdings in Principal Financial Group by 6,656.1% in the 2nd quarter. Janus Henderson Group PLC now owns 3,020,597 shares of the financial services provider’s stock worth $193,529,000 after buying an additional 2,975,888 shares during the period. Schroder Investment Management Group boosted its holdings in Principal Financial Group by 17.0% in the 3rd quarter. Schroder Investment Management Group now owns 1,807,710 shares of the financial services provider’s stock worth $115,693,000 after buying an additional 262,065 shares during the period. Allianz Asset Management GmbH boosted its holdings in Principal Financial Group by 29.4% in the 3rd quarter. Allianz Asset Management GmbH now owns 1,607,888 shares of the financial services provider’s stock worth $103,451,000 after buying an additional 365,068 shares during the period. Legal & General Group Plc boosted its holdings in Principal Financial Group by 2.1% in the 3rd quarter. Legal & General Group Plc now owns 1,506,176 shares of the financial services provider’s stock worth $96,908,000 after buying an additional 31,107 shares during the period. Finally, Schwab Charles Investment Management Inc. boosted its holdings in Principal Financial Group by 5.4% in the 4th quarter. Schwab Charles Investment Management Inc. now owns 1,384,166 shares of the financial services provider’s stock worth $97,667,000 after buying an additional 71,076 shares during the period. 68.64% of the stock is owned by institutional investors.

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Principal Financial Group Company Profile

Principal Financial Group, Inc is an investment management company. The Company offers a range of financial products and services, including retirement, asset management and insurance. Its segments include Retirement and Income Solutions; Principal Global Investors, Principal International; U.S. Insurance Solutions, and Corporate.

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