Prudential Financial (PRU) Investor Outlook & Risks

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photograph taken of the Prudential Financial buildings

Prudential Financial (PRU) recently held its annual investor outlook call and, in William Block’s opinion, there was a lot to like about what management had to say.

Not only did management project for Prudential to have a strong 2019 but they also announced a meaningful addition to the insurer’s buyback program ($2B).

PRU shares have not performed well so far in 2018, so the positive takeaways from the investor outlook call should be welcomed news.

The biggest risk for any insurer, including Prudential, is the sufficiency of the company’s reserves. The company will likely have immaterial one-off reserve charges on a somewhat consistent basis but any material adjustment could negatively impact Prudential’s stock price.

Given the recent uncertainty in the market, it is important to remember that an economic downturn would negatively impact Prudential’s near-term business prospects.

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