Prudential Financial, Inc. PRU is slated to report third-quarter 2024 earnings on Oct. 30, after market close. PRU delivered a negative earnings surprise in the last reported quarter.

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Factors to Consider

The U.S. business is likely to have gained from favorable comparative net impact from annual reviews and updates of assumptions and other refinements, improved underwriting results and higher net investment spread results.

Prudential Financial’s international businesses are likely to have benefited from improved performance at Gibraltar Life and Other operations. The upside is likely to have been partially offset by a soft performance at Life Planner operations. 

Group Insurance business in the to-be-reported quarter is likely to have been affected by a less favorable comparative net impact from annual reviews and updates of assumptions and other refinements, higher operating expenses, lower premiums and policy charges and fee income.

PGIM is likely to have gained from higher asset management fees, higher revenues from certain consolidated funds, higher other related revenues, higher incentive fees and strong investment performance. The upside is likely to have been partially offset by higher compensation expenses. 

Assets under management are likely to have benefited from equity market appreciation, tightening credit spreads, contributions from the Deerpath Capital acquisition and strong investment performance, partially offset by the impacts of higher interest rates and unfavorable foreign exchange rates.

Net investment income is likely to have gained from portfolio growth, higher net investment income due to growth in indexed variable annuities, higher income on non-coupon investments and higher reinvestment rates. We expect net investment income to increase 19.3% to $4.6 billion in the to-be-reported quarter.

Expenses are likely to have increased because of higher policyholders’ benefits and amortization of deferred policy acquisition costs. We expect total expenses to be $11.8 billion. 

The Individual Retirement Strategies business is likely to have benefited from higher net investment income due to growth in indexed variable annuities and higher reinvestment rates. The upside is likely to have been partially offset by higher amortization costs as well as lower fee income, net of distribution expenses, resulting from lower average separate account values.

The company estimates earnings per share to be $3.48 for the third quarter of 2024.

The Zacks Consensus Estimate for earnings per share is pegged at $3.47, indicating an increase of 0.8% from the year-ago period’s reported figure. 

The Zacks Consensus Estimate for revenues is pegged at $14.57 billion, indicating an increase of 43.8% from the year-ago quarter’s reported figure.

What Our Quantitative Model Unveils

Our proven model does not conclusively predict an earnings beat for Prudential Financial this time around. This is because a stock needs to have the right combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold). This is not the case, as you can see below:

Earnings ESP: Prudential Financial has an Earnings ESP of -0.25%. This is because the Most Accurate Estimate of $3.46 is pegged lower than the Zacks Consensus Estimate of $3.47. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: PRU carries a Zacks Rank #3 at present.

Stocks to Consider

Some insurance stocks with the right combination of elements to deliver an earnings beat this time around are:

Enact Holdings, Inc. ACT has an Earnings ESP of +10.89% and a Zacks Rank #3 at present. The Zacks Consensus Estimate for third-quarter 2024 earnings is pegged at $1.01, indicating a year-over-year decrease of 0.9%. You can see the complete list of today’s Zacks #1 Rank stocks here.

ACT’s earnings beat estimates in each of the last four reported quarters.

Kemper Corporation KMPR has an Earnings ESP of +3.28% and a Zacks Rank #3 at present. The Zacks Consensus Estimate for third-quarter 2024 earnings is pegged at $1.30, indicating a year-over-year increase of 395.4%. 

KMPR’s earnings beat estimates in three of the last four reported quarters and missed in one.

Everest Group, Ltd. EG has an Earnings ESP of +8.60% and a Zacks Rank #3 at present. The Zacks Consensus Estimate for third-quarter 2024 earnings is pegged at $11.9, indicating a year-over-year decrease of 15.7%. 

EG’s earnings beat estimates in three of the last four reported quarters and missed in one.

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Prudential Financial, Inc. (PRU) : Free Stock Analysis Report

Enact Holdings, Inc. (ACT) : Free Stock Analysis Report

Kemper Corporation (KMPR) : Free Stock Analysis Report

Everest Group, Ltd. (EG) : Free Stock Analysis Report

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