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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Prudential Financial, Inc. (XNYS:PRU) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
PRU
Name:
PRUDENTIAL FINANCIAL, INC. (XNYS:PRU)
Sector:
1.00M
Industry:
Insurance�Life
CEO:
Mr. Charles Lowrey
Total Employees:
40,916
Our Technological Advancement Rating
Our Rating:
-
-
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF PRUDENTIAL FINANCIAL, INC.(PRU) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND INSURANCE�LIFE INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
94.89
One Month Price Target:
$95.63
Six Month Price Target :
$99.34
Likely Price in One Year's Time:
Ticker:
$103.79
Likely Trading Range Today Under (Normal Volatility)
$94.47
Price Upper limit ($) :
$95.4
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$89.28
This week:
$82.34
This month :
$69.8
Other Primary facts
Market Cap:
35.03B
Market Cap Classification:
Large Cap
Number of Shares
IPO Date:
372.00M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
21.04%
-20.11%
Worst Daily Decline:
Our Options Trading Entry Points
Iron Condor entry points for options expiring in 1 week's time
Low risk (<2%) entry points
Buy Call:
Sell Call:
Buy Put:
Sell Put:
$120.93
$108.99
$68.85
$80.79
Medium risk (<10%) entry points
Buy Call
Sell Call
$105.11
Buy Put:
Sell Put:
$102.56
$84.64
$87.22
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
PRU
Sharpe Ratio:
1.29%
Comparison:
PRU, is amongst the top 60% stocks with highest risk-adjusted returns
Sharpe ratio is -0.22% lower than the industry
& is -43.40% lower than the market/S&P 500 average
Average Returns/Yield of
PRU
Daily returns:
0.05%
Weekly returns:
0.23%
Monthly returns:
0.93%
Yearly returns:
12.17%
Comparison of returns:
Average annual returns/yield (last 3 years) is -8.74% below industry average
Classification:
PRU, is amongst the top 60% highest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.15
Statistical test of Returns:
PRU has yielded returns statistically similar to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
2.90%
Weekly Volatility:
6.49%
Monthly Volatility:
12.98%
Yearly Volatility:
44.95%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
0.52%
Volatility in last five trading days has been -82.08% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-5.91%
Weekly VaR:
-13.22%
Monthly VaR:
-26.44%
How Much Can the price of
PRU
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-23%
Worst case (decline):
-91.60%
This translates to price declining to:
$73.20
This translates to price declining to:
$7.97
Severe Crash Probability
Risk of crash in next 6/12 months: Medium (<50%)
What is Value at Risk (VaR)?
Risk Fundamentals
PRU is a 86.63% riskier investment compared to the market/S&P 500 & is 59.88% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is -5.24% below industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
PRU
Beta in relation to market/S&P 500--1.40
Expected beta in 1 year's time:
2.628
Expected beta in 3 year's time:
3.717
Unlevered (debt free) Beta:
1.016
Beta in relation to Nasdaq (XNAS):
0.923
Beta in relation to all global stocks::
1.122
Beta Comparison & Analysis
Beta of competitors/peers::
1.079
Beta is 29.32% higher than peers
Average Industry Beta:
1.194
Beta is 16.89% above industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
9.70%
Sustainable growth rate is 14.59% above industry average
Alpha provided | Alpha Analysis
Alpha provided:
-0.016
Alpha is -289.87% below industry average alpha yield
Alpha is -102% below the market average
Analysis of Cost of Capital of
PRU
Equity cost of capital:
0.127
Equity cost of capital is 12.19% above industry mean WACC
Unlevered (without debt) cost of capital:
9.25%
Before-tax cost of debt:
5.44%
After-tax cost of debt:
4.29%
Overall debt rating:
Lower BB medium grade (Fifth highest grade)
Weighted average cost of capital (WACC):
4.29%
WACC is 11.81% above industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$180.64
Revenue growth rate per share of (3Y):
0.79
Annual revenue growth rate is 7.72% above the industry average
EPS:
$12.32
Expected Annual growth rate of EPS (3Y):
23.57%
Expected future EPS growth rate is 481.60% higher than the Insurance�Life industry
Free cash flow (FCF) per share:
$34.09
Balance sheet equity growth per share: 28.63%
Equity growth rate per share is 276.35% higher than the industry
Debt per share
$52.93
EBITDA per share
$19.16
Valuation Analysis Today of
PRU
P/E Ratio:
17.57
P/E Ratio of Competitors/Peers:
14.28
P/E ratio is 23.06% higher than main peers & is 80.88% higher than the industry
Stock price/value with industry average P/E ratio: $119.69
PRU is -20.72% undervalued if valued using industry average P/E ratio
Share value as per dividend discount (DDM) model: $61.56
Present value of the expected future dividends only: $44.26
P/S (Price to Sales ratio):
0.53
Price to sales ratio is -51.14% below the industry mean
P/B (Price to book value ratio):
0.79
Price to free cash flow: 2.78
Price to free cash flow ratio is -39.34% lower than the industry
Net income growth rate (3Y):
104.48%
Net income growth rate is 357.85% higher than the average industry net income growth rate
Dividend Analysis
Dividend payout rate: 9.58%
Dividend yeild: 4.95%
Previous Dividend: $1.20
Previous adjusted dividend: $1.20
Previous Dividend: $4.70
Expected next dividend best case: $1.25
Expected next dividend worst case: $1.15
Average dividend payment (long-term): $1.13
Average dividend increase/decrease (growth rate) % per period: 1.89%
Expected next dividend payment date: 14/09/2022
Expected next dividend record date: 22/08/2022
Expected next dividend declaration date: 08/08/2022
Previous dividend payment date: 16/06/2022
Previous dividend record date: 24/05/2022
Previous dividend declaration date: 05/10/2022
Dividend History:
2022-05-23--$1.20
2021-11-22--$1.15
2021-05-24--$1.15
2022-02-14--$1.20
2021-08-23--$1.15
2021-02-12--$1.15
Dividend growth rate is -42.68% lower than the industry average
In-depth Debt & Leverage Analysis
Debt to equity ratio:
44.77%
Net debt to equity ratio:
13.98%
Debt to assets ratio:
2.24%
Net debt to assets ratio:
0.70%
Debt-to-asset ratio is -97.44% below industry average
Ability to repay debt:
Interest coverage ratio:
6.48
Interest coverage ratio is 55.02% more than industry average
Looking forward:
Debt growth rate:
0.00%
-
Debt repayment rate in last quarter: 0.30%
Analysis of Key Statistics
Correlation of price movement with the market:
0.758
Statistical significance of correlation:
PRU has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.695
Stock price is 9.08% more correlated with the market, compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.695
Correlation of price movement with Nasdaq (^IXIC):
0.042
Covariance of price movement with the market:
0.071
Kurtosis
12.723
Returns have severe fat-tails (leptokurtic), i.e., returns considerably higher or lower than the mean returns are considerably more likely, compared to assets with normally distributed returns
Skewness of returns:
-0.193
Returns are, approximately, symmetrical
Fundamental Analysis & Dupont Analysis of
PRU
Gross Profit Margin Ratio:
-
Operating Profit Margin Ratio:
5.04%
Operating profit margin is -238.68% lower than the industry
Net Profit Margin Ratio:
-
Effective Tax Rate:
16.56%
Effective tax rate is -18.49% lower than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
11.06%
Return on equity (ROE) is 251.48% higher than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
0.55%
Return on assets (ROA) is -34.03% lower than the industry
Financial Leverage:
1.0x
Current Ratio:
8.77
Current ratio is -65.19% below industry average
Cash Conversion Cycle (days):
0
-
The remaining useful life of property plant & equipment is: 10.9 years
Stock based compensation to net income ratio:
-
In-depth Efficiency Analysis
Revenue generated per employee:
1.6M
Each employee generates -13% less revenue than industry average revenue per employee
EBITDA generated per employee:
174.2K
Each employee generates -46% less EBITDA than industry average revenue per employee
Profit generated per employee:
118.9K
Each employee generates -49% less net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
0.0K
Each employee generates -100% less free cash flow than industry average revenue per employee
Assets/Capital per employee
0.0K
Each employee generates -100% less free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
-
-
Competitors/Peer firms of
PRU
Nu Holdings Ltd (XNYS:NU)
Banco Bilbao Vizcaya Argentaria SA (XNYS:BBVA)
Banco Santander Brasil SA (XNYS:BSBR)
MSCI INC. (XNYS:MSCI)
AFLAC INCORPORATED (XNYS:AFL)
The Travelers Companies, Inc. (XNYS:TRV)
KKR & CO. INC. (XNYS:KKR)
MANULIFE FINANCIAL CORP (XNYS:MFC)
BARCLAYS PLC (XNYS:BCS)
Current Analyst Ratings
Strong buy�8%
Buy�21%
Hold�38%
Sell�0%
Strong sell�0%
Overall analyst sentiment is: Hold
Income Statement
Period:
TTM
Date:
3/31/22
Revenue:
67.20B
Cost of Revenue:
Gross Profit:
R&D Expense
General & Admin Expenses:
Selling, General & Admin Expenses
Sales and Marketing Expenses
Other Expenses :
Operating Expenses :
Cost & Expenses :
Interest Income:
Interest Expenses:
Depreciation & Amortization:
EBITDA:
Operating Income:
Other Income Expenses:
Income Before Tax:
Income Tax Expense:
Net Income:
Balance Sheet
Date:
Calendar Year:
Period:
Cash & Cash Equivalents:
Short Term Investments:
Cash & Short Term Investments:
Net Receivables:
Inventory:
Other Current Assets:
Total Current Assets:
PP&E:
Goodwill:
Intangible Assets:
Long Term Investments:
Tax Assets:
Other Non-Current Assets:
Total Non-Current Assets:
Other Assets:
Total Assets:
Accounts Payable:
Short Term Debt:
Tax Payables:
Deferred Revenue:
Other Current Liabilities:
Total Current Liabilities:
Long Term Debt:
Other Non-Current Liabilities:
Total Non Current Liabilities:
Other Liabilities:
Total Liabilities:
Common Stock:
Retained Earnings:
Accumulated Other Comprehensive Loss:
Other Total Stockholders' Equity:
Total Stockholders' Equity:
Total Liabilities and Stockholders' Equity:
Total Investments:
Total Debt:
Net Debt:
-
-
-
13.48B
13.45B
- 26000.00K
-
3.21B
-
1.10B
192.00M
7.13B
3.39B
4.87B
5.85B
969.00M
4.87B
Statement of Cash Flow
Date:
Period:
18.00M
Differed Income Tax :
-
Stock Based Compensation :
-
Change in Working Capital :
27.00M
Accounts Receivables:
-
Other Working Capital:
-
Other Non-Cash Items:
-
Net Cash Provided by Operating Activities:
1.00M
Investments in PP&E:
-
Net Acquisitions:
-
Purchases of Investments:
-
Sales/Maturities of Investments:
Other Investing Activities:
Net Cash Used for Investing Activities:
Debt Repayment:
Common Stock Issued:
Common Stock Repurchased:
Dividend Paid:
Other Financing Activities:
Net Cash Used Provided by Financing Activities:
Effect of FOREX on Changes in Cash:
Net Changes in Cash:
Cash at End of Period:
Cash at Beginning of Period:
Operating Cash Flow:
Capital Expenditure:
Free Cash Flow (FCF):
3/31/22
2022
Q1
14.09B
4.59B
18.68B
-
-
- 13907000.00K
4.77B
-
-
-
455.75B
-
-
-
873.30B
878.07B
-
544.00M
4.50B
-
-
544.00M
19.69B
813.16B
832.84B
-
833.39B
6.00M
36.16B
4.2B
3.61B
March 31, 2022 at 6:00:00 AM
48.02B
43.98B
877.37B
460.34B
20.23B
6.1B
-
495.00M
495.00M
- 60000.00K
69.00M
- 364000.00K
- 466000.00K
1.25B
426.00M
- 86000.00K
1.20B
14.14B
12.93B
1.00M
-
1.00M
Our Proprietary Portfolio Rating
Our Rating:
-
Price Forecast/Expected Price in Next 5 Years of
PRU
2023
2024
2025
2026
2027
$104.31
$203.54
$222.63
$243.51
$266.35