- Credit Suisse analyst Andrew Kligerman downgraded Principal Financial Group ( NASDAQ: PFG ) to Neutral from Outperform Thursday on its limited opportunities for multiple expansion.
- PFG stock has dipped 1.1% in premarket trading.
- PFG is currently trading at 10.6x Credit Suisse's estimated 2023 EPS (or 10.9x consensus estimates) compared with the peer average of 8.0x. PFG's closest peer Voya ( VOYA ) trades at 8.2x CS/consensus estimated 2023 EPS, Kligerman wrote in a note to clients. See PFG's stock performance vs. VOYA's in this chart .
- The analyst favors Voya ( VOYA ), "given the wider valuation gap that has emerged."
- He still likes Principal's ( PFG ) business mix and strategy, though, favoring its focus on small- to medium-sized retirement and employee benefits related businesses, combined with its shift to higher multiple capital light businesses.
- Kligerman's Neutral rating agrees with the Quant rating of Hold and the average Wall Street rating .
- SA contributor the Wolf Report explains why it's not yet time to go back to Principal Financial Group ( PFG ).
For further details see:
Principal Financial Group cut to Neutral at Credit Suisse on valuation