Principal Financial (PFG) Earnings Expected to Grow: Should You Buy?

Core Viewpoint - Wall Street anticipates a year-over-year increase in earnings for Principal Financial (PFG) despite lower revenues, with a focus on how actual results compare to estimates impacting stock price [1][2]. Earnings Expectations - Principal Financial is expected to report quarterly earnings of $1.98 per share, reflecting a year-over-year increase of +21.5%, while revenues are projected at $4 billion, a decrease of 1.7% from the previous year [3]. - The earnings report is scheduled for release on July 28, and better-than-expected results could lead to a stock price increase, whereas disappointing results may cause a decline [2]. Estimate Revisions - The consensus EPS estimate has been revised 0.31% higher in the last 30 days, indicating a slight positive reassessment by analysts [4]. - However, the Most Accurate Estimate for Principal Financial is lower than the Zacks Consensus Estimate, resulting in an Earnings ESP of -1.14%, suggesting a bearish outlook from analysts [12]. Earnings Surprise Prediction - The Zacks Earnings ESP model indicates that a positive or negative reading can predict the likelihood of actual earnings deviating from consensus estimates, with a strong predictive power for positive readings [9][10]. - Principal Financial's current Zacks Rank is 3, which complicates the prediction of an earnings beat given the negative Earnings ESP [12]. Historical Performance - In the last reported quarter, Principal Financial's actual earnings of $1.81 per share fell short of the expected $1.85, resulting in a surprise of -2.16% [13]. - The company has not surpassed consensus EPS estimates in any of the last four quarters, indicating a trend of underperformance [14]. Conclusion - Principal Financial does not appear to be a strong candidate for an earnings beat, and investors should consider other factors when evaluating the stock ahead of the earnings release [17].