Will the Prudential-LPL Retirement Alliance Shift Prudential Financial’s (PRU) Long-Term Growth Narrative?

Prudential Financial and LPL Financial announced an expanded alliance earlier this month, aiming to offer insurance-based retirement income strategies to LPL’s network of 29,000 financial advisors through a new managed accounts platform integration. This collaboration seeks to address rising retirement income needs by introducing protected lifetime income solutions to advisors who historically did not use insurance-led retirement strategies, leveraging demographic trends of a rapidly aging US population. We’ll examine how Prudential’s push to expand its retirement income offerings for financial advisors may influence its growth outlook and analyst assumptions.

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Prudential Financial Investment Narrative Recap

If you’re considering Prudential Financial as a long-term holding, you’ll need to believe the company can harness demographic shifts, particularly the growth in retirement-age Americans, to expand its retirement income solutions, and that it can defend market share in the face of intensifying competition. The expanded alliance with LPL Financial is a meaningful step for Prudential’s retirement segment but does not materially change the near-term risk: volatility stemming from the runoff of its legacy variable annuity block, which remains a headwind for earnings stability.

Among recent announcements, Prudential’s July launch of ActiveIncome with Dimensional Fund Advisors stands out, as it also targets the growing need for protected retirement income within managed accounts, echoing the LPL partnership’s focus. This continued product innovation supports the key business catalyst of catering to the evolving retirement market, against the backdrop of heightened competition in the space.

On the other hand, investors should factor in the potential for renewed earnings pressures if the legacy variable annuity runoff accelerates, and especially if …

Read the full narrative on Prudential Financial (it’s free!)

Prudential Financial is projected to reach $64.1 billion in revenue and $4.6 billion in earnings by 2028. This outlook assumes an annual revenue growth rate of 2.7% and an earnings increase of $3.0 billion from the current $1.6 billion.

Uncover how Prudential Financial’s forecasts yield a $115.71 fair value, a 11% upside to its current price.

Exploring Other Perspectives

Simply Wall St Community members place Prudential’s fair value anywhere from US$92.86 to US$292.13 across 5 separate forecasts. While retirement market growth is a common catalyst, you should be aware that consensus only tells part of the story.

Explore 5 other fair value estimates on Prudential Financial – why the stock might be worth 11% less than the current price!

Build Your Own Prudential Financial Narrative

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This article by Simply Wall St is general in nature. We provide commentary based on historical data
and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your
financial situation. We aim to bring you long-term focused analysis driven by fundamental data.
Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
Simply Wall St has no position in any stocks mentioned.

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