Home / Business and Economy / Principal Financial Group Lags Market Despite Strong Q2 Earnings
Principal Financial Group Lags Market Despite Strong Q2 Earnings
29 Aug
Summary
- PFG stock up just 4.4% YTD, underperforming S&P 500's 10.2% rise
- PFG missed earnings consensus in 3 of last 4 quarters
- Morgan Stanley analyst maintains "Underweight" rating, raises price target
As of August 29th, 2025, Des Moines-based financial services provider Principal Financial Group (PFG) has underperformed the broader market over the past year. While the company's stock has gained 4.4% year-to-date, the S&P 500 Index has rallied 10.2% during the same period.
PFG's underperformance is also evident when compared to the Financial Select Sector SPDR Fund (XLF), which has gained around 11.3% so far this year. The exchange-traded fund has outpaced PFG's single-digit returns over the same timeframe.
In Q2 2025, PFG reported adjusted earnings per share of $2.16, exceeding Wall Street's expectations of $1.98. However, the company's earnings surprise history has been disappointing, as it missed the consensus estimate in three of the last four quarters while beating the forecast on one occasion.
Looking ahead, analysts expect PFG's earnings to grow 18.4% to $8.25 per share on a diluted basis for the current fiscal year ending in December. Despite the strong Q2 results, the overall sentiment on the stock remains cautious. Of the 15 analysts covering PFG, the consensus rating is a "Hold," with four "Strong Buy" recommendations, eight "Holds," one "Moderate Sell," and two "Strong Sells."
On August 18th, 2025, Morgan Stanley analyst Bob Huang maintained an "Underweight" rating on PFG and raised the price target to $77. The mean price target of $85.77 represents a 6.1% premium to the stock's current levels, while the Street-high target of $101 suggests an upside potential of 24.9%.
