Overview#
BMO Capital has lowered its price target for Prudential Financial stock (NYSE:PRU) from $91 to $87, maintaining an Underperform rating. The stock is currently priced at $94.85, reflecting a 14.8% decline year-to-date and nearing its 52-week low of $91.89.
Earnings Estimates Reduced#
The firm has cut its earnings per share (EPS) estimates for 2026 and 2027 by about 4%, attributing this to challenges in Prudential's POJ (Prudential of Japan) business. This adjustment follows a trend, as seven analysts have also revised their earnings forecasts downward, indicating a broader reassessment of the company’s future performance. Prudential Financial has announced a suspension of sales in Japan for an additional 180 days, extending an earlier 90-day halt.
Impact of Market Conditions#
BMO Capital anticipates that core earnings in Prudential’s International segment may continue to decline at a low single-digit rate, excluding specific impacts from the POJ business. The firm highlighted macroeconomic challenges, such as a weaker Japanese yen and potential regulatory issues that could affect Prudential’s other operations in Japan.
Analyst Ratings and Valuation#
Despite the near-term challenges, BMO Capital has kept its Underperform rating on Prudential Financial. The stock is currently trading at a price-to-earnings (P/E) ratio of 9.49 and offers a dividend yield of 5.9%, suggesting it may be undervalued at this time. In related news, Prudential has extended its sales suspension in Japan, which is expected to negatively impact earnings by $200 million in 2026 and $425 million in 2027. Other firms, including Evercore ISI and Barclays, have also adjusted their price targets and ratings for Prudential, citing similar concerns regarding the company's performance in Japan.