2024-04-08 22:54:15 ET
Summary
- Principal Financial Group's shares have gained 16% but lagged behind the S&P 500 due to net outflows in its asset management business.
- The company's recent financials showed positive improvements in its retirement and income solutions unit, but concerns remain about its asset manager's performance.
- PFG's exposure to commercial real estate and weak valuations in its real estate funds pose downside risks to earnings.
Shares of Principal Financial Group ( PFG ) are near a 52-week, though their 16% gain has lagged the S&P 500, as its asset management business has faced net outflows. I last wrote about Principal in October , when I rated shares a “hold,” since then, they have returned about 26%, nearly identical to the S&P 500. That is consistent with my view that shares should “perform broadly in-line with the market.” Still, with more recent financials, still elevated interest rates, and a meaningfully higher share price, it is an appropriate time to revisit the stock. After this move, I would take profits more aggressively....
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Principal Financial: Asset Management Headwinds Make Shares Less Attractive (Rating Downgrade)