Principal Financial(US:PFG) ZACKS·2026-01-20 16:20Core Insights - Principal Financial Group, Inc. (PFG) shares have increased by 12.3% over the last six months, outperforming the Finance sector's growth of 8.3% and the industry growth of 3.4% [1] - The stock closed at $88.49, close to its 52-week high of $92.51, indicating strong investor confidence and potential for further price appreciation [2] - PFG is trading above its 50-day and 200-day simple moving averages, suggesting solid upward momentum [3] Financial Performance - Principal Financial anticipates long-term revenue and margin growth across all segments, supported by strengths in retirement, benefits, asset management, and claims [6] - The Zacks Consensus Estimate projects a 13.4% increase in earnings per share and a 7.6% increase in revenues for 2026 compared to 2025 [8] - The company has a market capitalization of $19.71 billion, with an average trading volume of 1.2 million shares over the last three months [2] Valuation Metrics - PFG shares are trading at a price-to-book value of 1.68X, which is lower than the industry average of 2.63X and the Finance sector's 4.36X, indicating a better entry point for investors [7] - The average price target from 12 analysts is $91.08 per share, suggesting a potential upside of 0.11% from the last closing price [9] Analyst Sentiment - Three out of six analysts have raised their estimates for PFG's 2026 earnings over the past 60 days, leading to a 0.3% increase in the Zacks Consensus Estimate for that year [11] - The company has a Value Score of A, indicating it is among the most attractive value stocks [7] Growth Drivers - PFG's revenue growth is expected to improve due to higher premiums, fees, and improved net investment income across its segments [12] - The company benefits from its leadership in retirement and long-term savings, group benefits, and global asset management, contributing to solid operating earnings [13] - Strong institutional flows across various asset classes are likely to drive positive net cash flow [16] Capital Management - PFG has a strong capital position with $1.6 billion of excess and available capital, positioning it well for long-term financial targets [17] - The company returned approximately $400 million to shareholders in Q3 2025 and aims to deliver a capital return target of $1.4 billion to $1.7 billion in 2025 [19] - The board declared a fourth-quarter dividend with an 8% increase from the previous quarter, aligning with a targeted 40% dividend payout ratio [18] Conclusion - PFG's financial stability, favorable growth estimates, and strategic initiatives suggest a positive outlook for potential investors [20] - The combination of impressive dividend history, attractive valuations, and optimistic analyst sentiment makes it an opportune time for investment [21]