PFG
Principal Financial Group, Inc.$86.19
Unclear
Target $83.16
Report: Mar 13, 2026Financial Services • Insurance - Diversified • Mature CompounderSnapshot
Decision-first overview with recommendation, valuation anchor, and current setup.
Company Overview
Research Snapshot
Price History
Pelican View
Current$86.19-3.5%
Rec: UnclearConviction: Medium
Entry Target
$63.97
(26% below current)
Fair Value
$83.16
(4% below current)
Stop Loss
$65.17
(24% below current)
Position Size
Starter
Time Horizon
Long-Term
Key Metrics
Live Snapshot
Market Data
52 Week High$97.88
52 Week Low$68.39
Avg. 3 Month Volume1.70M
Efficiency
LTM Gross Margin43.8%
LTM EBITDA Margin10.2%
LTM EBIT Margin8.6%
LTM Operating Margin9.1%
LTM ROA0.4%
LTM ROE10.3%
LTM ROIC0.4%
LTM ROCE0.4%
Capital Structure
Market Cap (MM)$19.5B
Enterprise Value (MM)$19.1B
Shares Outstanding216.84M
Total Debt (MM)$3.95B
Cash & Equivalents (MM)$4.43B
LTM Net Debt (MM)$-477.00M
LTM Net Debt/EBITDA-0.3x
Growth
TTM Rev. Growth-3.1%
Last 3-Yr Rev. CAGR-3.7%
Last 3-Yr EBITDA CAGR-36.8%
Last 3-Yr EPS CAGR-34.9%
Valuation
Street Target Price$91.50
LTM EV/Revenue1.2x
LTM EV/Gross Profit2.8x
LTM EV/EBIT14.2x
LTM EV/EBITDA11.9x
LTM P/E16.5x
LTM EV/FCF4.3x
LTM P/FCF4.4x
LTM P/TB0.1x
LTM P/B1.6x
Dividend Yield3.4%
Payout Ratio57.9%
Executive SummarySituation: Current price is $86.19 versus fair value $83.16 (-3.5% expected return), and valuation confidence is stable. Debate: Bull case depends on Achievement of 9-12% EPS growth and 15-17% ROE targets via 9% transfer deposits/$3B PRT sales, validating margin durability (RIS 41%, IM 36%) and unlocking $1.5-1.8B deployment. Bear case centers on CRE devaluations in general account/PGI portfolios impair VII and trigger write-downs, eroding 9.1% margins to 7% and FCF to $1.4B Year 5. Conclusion: Recommendation is Unclear; maintain no position until reliability and catalyst evidence improve.
Bull Case
Switching costs from bundled SMB retirement platforms sustain 9% transfer deposit growth and 28.4% FCF margins enabling $1.5B annual returns; institutional net buying 927k shares Q4 2025 signals conviction; DCF base 94.8 with 9.6x terminal. Aggressive buybacks at 8.3% TTM yield compound per-share value amid low 0.6% CapEx.
Bear Case
Revenue -3.1% YoY and margins down 260bps to 9.1% from CRE exposure and fee compression; ROIC 0.4% below WACC signals moat erosion; CEO net sales $2.36M last 12 months at $93 avg vs 86.19 current; bear DCF 64.9.
Key Catalysts
Mid-Term (6-18 months)Impact: High
Achievement of 9-12% EPS growth and 15-17% ROE targets via 9% transfer deposits/$3B PRT sales, validating margin durability (RIS 41%, IM 36%...
Near-Term (0-6 months)Impact: Moderate
Chile annuity divestiture closes accretive to EPS, with $800M holding co excess capital funding elevated Q4 buybacks.
Long-Term (18+ months)Impact: Moderate
PFG trades at 4.2x P/FCF vs 5Y avg 5.5x amid 3.5% short interest rise, with Q4 2025 earnings delivering 12% EPS beat but revenue miss, makin...
Primary Risks
Concern: Medium
CRE devaluations in general account/PGI portfolios impair VII and trigger write-downs, eroding 9.1% margins to 7% and FCF to $1.4B Year 5.
Concern: High
Fee compression in asset management from market outperformance erodes RIS/IM spreads, stalling 10% blended margins.
Concern: Medium
Stewardship strong with LTIP 70% PSUs on 3-year ROE threshold 7.5% and RTSR modifier, CEO holding 411,865 shares post-$2.36M sales; board fi...
Recent Activity
2024-10-25SEC Filing (8-K)
-6.63%Principal Financial Group announces third quarter 2024 results and raises dividend
2023-03-09Market Movement
-5.19%Market/Sector Move -5.19%
2023-03-02SEC Filing (8-K)
-5.54%Principal Financial Group announces 2023 and long-term financial guidance
2022-10-28SEC Filing (8-K)
+7.54%Principal Financial Group announces third quarter 2022 results and declares dividend
2022-08-09SEC Filing (8-K)
+7.12%Principal Financial Group announces second quarter 2022 results and declares dividend
Valuation Table
9.8/10Decision Grade
Scenario Range
$1
Bear
$2
Base
$2
Bull
$86