Deutsche Bank Initiates Coverage on Prudential Financial at "Buy" (PRU)

Deutsche Bank Initiates Coverage on Prudential Financial at “Buy” (PRU)


Deutsche Bank analysts started multinational financial services firm Prudential Financial Inc (PRU) with a “Buy” rating as the company is in position to see growth in 2013 after a weak 2012.

The analysts see shares of PRU reaching $67, suggesting a +20.1% upside to Tuesday’s closing price of $55.66. Also, Deutsche Bank’s EPS expectations for the Newark, NJ-based company for fiscal year 2012, 2013, and 2014 are $6.15, $7.85, and $9.05, respectively. These numbers suggest above average growth.

Deutsche Bank commented, “Coming off of a weak and ‘noisy’ 2012, we believe that the company’s ROE should increase to 12.8%, well-above its cost-of-capital, in 2013. The company’s protection orientation, particularly in its International Insurance segment (which accounts for 50% of earnings), offers earnings protection. Moreover, pricing increases in the under-performing Group Insurance and a business mix shift with Retirement and US Insurance should all benefit results.”

Prudential shares were up 34 cents, or +0.61%, during premarket trading on Wednesday. The stock is up +5.56% over the past year.

The Bottom Line
Shares of Prudential Financial (PRU) have a 2.87% dividend yield, based on last night’s closing stock price of $55.66. The stock has technical support in the $50-$51 price area. If the shares can firm up, we see overhead resistance around the $58-$60 price levels.

Prudential Financial Inc (PRU) is not recommended at this time, holding a DARS™ Rating of 3.4 out of 5 stars.

Be sure to visit our complete recommended list of the Best Dividend Stocks, as well as a detailed explanation of our ratings system here.

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