Credit Suisse Starts Principal Financial Group (PFG) at Underperform
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Credit Suisse initiates coverage on Principal Financial Group (NYSE: PFG) with a Underperform rating and a price target of $53.00.
Analyst John Nadel commented, "Principal’s increasingly fee-based business mix has translated into strong free cash flow generation and ROE improvement, a trend we expect to continue, albeit at a more measured pace relative to the last several years. Management has delivered healthy investment performance and solid net flows, consistently bucking the asset management industry trends. The company has been capitalizing on the need for investment management and retirement expertise not only among the growing population of retirees in the U.S. but also in select emerging markets like Latin America and in more developed markets overseas. However, in the near to intermediate term, we believe the combination of more intense competition, ongoing pressure on fees, exposure to Fx and EM volatility (albeit somewhat favorable recently), and spread pressure from lower interest rates could lead to more muted EPS growth and flattish margins."
Shares of Principal Financial Group closed at $52.55 yesterday.
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