Will Low Rates Drag Prudential Financial (PRU) Q2 Earnings? - Analyst Blog

By
A A A

Prudential Financial Inc. ( PRU ) is scheduled to report second-quarter 2014 results on Aug 6.

In the last quarter, this life insurer delivered a 5.7% positive earnings surprise. The average beat for the trailing four quarters is 15.1%

Let's see what factors might have influenced the earnings report this time around.

Factors Likely to Influence Q2 Results

A soft interest rate environment rate will keep investment income under pressure. Reinvestment yields primarily for investments in fixed maturity securities and commercial mortgage loans will remain low.

In addition, limited wage inflation, unemployment and intense competition are expected to weigh on U.S. Group insurance results.

However, Prudential Financial is will likely witness higher demand for retirement benefits products due to an aging American population with baby boomers entering retirement. Its increased focus on Asset Management, Annuities and International business would also drive results.

Earnings Whispers

Our proven model does not conclusively show that Prudential Financial is likely to beat earnings this quarter. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1, 2 or 3 for this to happen. However, that is not the case here as you will see below.

Zacks ESP :  Prudential Financial's Most Accurate estimate is pegged at $2.34 per share, which is below the Zacks Consensus Estimate of $2.35. The Earnings ESP is thus -0.43%.

Zacks Rank : Prudential Financial has a Zacks Rank #3 (Hold). Though Zacks Rank #1, 2 or 3 increases the predictive power of ESP, the company's ESP of -0.43% makes surprise prediction difficult.

Other Stocks to Consider

Here are some companies you may want to consider as our model shows that these have the right combination of elements to post an earnings beat this quarter:  

National General Holdings Corp. ( NGHC ) has an Earnings ESP of +8.00% and Zacks Rank #2 (Buy).

Qiwiplc ( QIWI ) has an Earnings ESP of +4.76% and a Zacks Rank #2.

Voya Financial, Inc. ( VOYA ) has an Earnings ESP of +2.86% and a Zacks Rank #3.


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

PRUDENTIAL FINL (PRU): Free Stock Analysis Report

QIWI PLC-ADR (QIWI): Free Stock Analysis Report

NATIONAL GNL HL (NGHC): Free Stock Analysis Report

VOYA FINANCIAL (VOYA): Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research



The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Business , Earnings , Stocks

Referenced Stocks: PRU , QIWI , NGHC , VOYA

Zacks.com

Zacks.com

More from Zacks.com:

Related Videos

How to Fire Your Adviser
How to Fire Your Adviser            

Stocks

Referenced

Most Active by Volume

75,750,465
  • $16.77 ▲ 0.36%
59,791,764
  • $101.58 ▲ 0.71%
38,720,622
  • $42.59 ▼ 0.28%
37,416,417
  • $46.52 ▼ 0.51%
35,101,793
  • $16.28 ▲ 0.74%
34,987,975
  • $99.53 ▲ 0.15%
33,760,830
  • $3.63 ▲ 0.69%
32,148,671
  • $17.61 ▲ 0.57%
As of 9/17/2014, 04:15 PM

Find a Credit Card

Select a credit card product by:
Select an offer:
Search
Data Provided by BankRate.com