Prudential share price to return to historic highs?

on Dec 18, 2013
Updated: Oct 21, 2019
Listen, Wednesday, December 18: Prudential Plc’s (LON:PRU) share price has gained almost 50 percent over the past year. As the UK’s biggest insurer by market capitalisation unveiled new growth targets with a focus on its Asian business last week (Prudential share price rises on ambitious new growth targets), analysts have started weighing the stock’s potential to return to historic highs.

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Prudential’s share price was up 0.79 percent to 1,280.00p as of 14:47 UTC. According to a stock analysis published by the Motley Fool today, Prudential’s share price can return to its recent high of 1,302p.
The insurance group touched this level during the last few days of November, when the company rallied along with the broader insurance sector. However, since making the high, Prudential has followed the wider market lower.

The Motley Fool cited Prudential’s recently-announced roadmap for growth as a potential catalyst for a rise in the share price. In addition, City analysts expect the company to grow earnings per share four percent this year and then 19 percent during 2014. According to some, the insurer is also likely to offer investors a special dividend if it reaches its targeted cash generation.

Based on current estimates, Prudential is expected to report earnings per share of 95p for 2014. This implies that the company is trading at a forward price-earnings ratio (P/E) of 13.4, below the sector’s average of 21. However, in each of the past five years, Prudential has beaten analysts’ estimates. The group’s past performance, coupled with its targets for growth, is expected to underpin investors’ confidence in the stock.

**Rating update**

Last week, Goldman Sachs Group lifted their price objective on Prudential’s shares from 1,480p to 1,500p. The firm currently has a ‘strong-buy’ rating on the stock. Goldman Sachs’ price target points to a potential upside of 18.20 percent from the company’s current price.

A number of other brokers have also recently announced their ratings for Prudential. Societe Generale reiterated a ‘buy’ rating on the shares last week, Barclays restated their ‘overweight’ rating, while JPMorgan reiterated an ‘underweight’ rating on the UK insurer.
According to AnalystRatingsNetwork data, three research analysts have a ‘sell’ rating on Prudential, two have it as a ‘hold’, 17 as a ‘buy’ and one calls it a ‘strong buy’. The stock’s average rating is ‘buy’ with a consensus price target of 1,343.21
**As of 15:18 UTC, buy Prudential shares at 1,276.00p.**
**As of 15:18 UTC, sell Prudential shares at 1,275.00p.**
Trade stocks with Hargreaves Lansdown from £5.95 per deal.
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