(By Balaseshan) RBC Capital Markets analyst Eric Berg upgraded his rating of Prudential Financial Inc. (NYSE: PRU) to "top pick" from "outperform" with $91 price target.
Berg said Prudential has been noteworthy on at least two fronts this year -- its stock, flat on the year, has underperformed the broader life insurance group, which is up 9 percent year to date.
And this disappointing stock-market under-performance has taken place despite excellent business performance at Prudential; the September quarter saw strong fundamentals at the Newark-based company almost across the board, the analyst noted.
Berg arrives at his $91 price target by assigning weights to the price target obtained using the residual income model and obtained using the regression analysis based on his approaches to valuation.
The analyst said his residual income model yielded an intrinsic value one year from now of $109 and his regression-based approach resulted in a price target of $73.
Prudential has operations in the United States, Asia, Europe and Latin America. Through its subsidiaries and affiliates, the company offers an array of financial products and services, including life insurance, annuities, retirement-related services, mutual funds and investment management.
PRU is trading up 1.42 percent at $50.66 on Thursday.