Principal Financial Group cut to Neutral at Credit Suisse on valuation

Aug. 18, 2022 9:18 AM ETPrincipal Financial Group, Inc. (PFG)VOYABy: Liz Kiesche, SA News Editor1 Comment

risk and reward balance concept

marekuliasz/iStock via Getty Images

  • Credit Suisse analyst Andrew Kligerman downgraded Principal Financial Group (NASDAQ:PFG) to Neutral from Outperform Thursday on its limited opportunities for multiple expansion.
  • PFG stock has dipped 1.1% in premarket trading.
  • PFG is currently trading at 10.6x Credit Suisse's estimated 2023 EPS (or 10.9x consensus estimates) compared with the peer average of 8.0x. PFG's closest peer Voya (VOYA) trades at 8.2x CS/consensus estimated 2023 EPS, Kligerman wrote in a note to clients. See PFG's stock performance vs. VOYA's in this chart.
  • The analyst favors Voya (VOYA), "given the wider valuation gap that has emerged."
  • He still likes Principal's (PFG) business mix and strategy, though, favoring its focus on small- to medium-sized retirement and employee benefits related businesses, combined with its shift to higher multiple capital light businesses.
  • Kligerman's Neutral rating agrees with the Quant rating of Hold and the average Wall Street rating.
  • SA contributor the Wolf Report explains why it's not yet time to go back to Principal Financial Group (PFG).

Recommended For You

Comments (1)

To ensure this doesn’t happen in the future, please enable Javascript and cookies in your browser.
Is this happening to you frequently? Please report it on our feedback forum.
If you have an ad-blocker enabled you may be blocked from proceeding. Please disable your ad-blocker and refresh.