Prudential share price surges as Berenberg points to valuation discount

Analysts lift price target on shares

Prudential share price surges as Berenberg points to valuation discount

Shares in Prudential (LON:PRU) have added about one percent in London in today’s session, outperforming the broader UK market, as analysts at Berenberg lifted their price target on the shares. The broker has pointed to the Pru’s ‘very substantial valuation discount’.

As of 13:01 BST, Prudential’s share price had added 0.99 percent to 1,629.00p, outperforming the blue-chip FTSE 100 index which has slipped marginally into the red and is currently 0.27 percent worse off at 7,128.45 points. The group’s shares have gained more than 14 percent over the past year, but are little changed in the year-to-date.

Berenberg lifted its price target on the Pru from 1,783p to 2,200p today, while maintaining its ‘buy’ rating on the shares. The broker explained that while historically the stock tended to track embedded value, appraisal value and profits, it had stopped doing so over the past two years, ‘taking a breather’ and in turn creating a ‘very substantial valuation discount’.

“The upward trajectory of the key metrics has continued, however, and the shares now have both excellent compounding and re-rating potential,” Berenberg pointed out, as quoted by Sharecast. The broker’s analyst Trevor Moss further noted that several factors had dented sentiment, including capital controls in China, slower sales of variable annuities in the US and net outflows at the FTSE 100 group’s M&G unit. Moss, however, expects all of the above to improve going forward, resulting in better news flow around the shares.

The 18 analysts offering 12-month price targets for Prudential for the Financial Times have a median target of 1,910.50p, with a high estimate of 2,100.00p and a low estimate of 1,469.00p. As of April 14, the consensus forecast amongst 20 polled investment analysts covering the blue-chip group has it that the company will outperform the market.

As of 13:25 BST, Wednesday, 19 April, Prudential plc share price is 1,626.00p.

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