BMO Capital Markets maintained its Underperform recommendation on Prudential Financial and kept a $94.00 price target, citing mounting risk factors tied to the insurer’s Japan business. The firm described Japan as experiencing "an unusually high level of macro volatility" and noted recent regulatory scrutiny that has prompted a reassessment of earnings growth prospects in the region.
The $94 price objective is materially below the stock’s current level of $111.11. In parallel with BMO’s note, market data show the company appears modestly overvalued under prevailing fair-value assessments, and seven analysts have adjusted their earnings forecasts lower for the upcoming reporting period. Prudential is scheduled to report earnings tomorrow.
BMO acknowledged that Prudential’s Japan franchise delivered strong absolute returns over the past decade and that management has actively used product repositioning and expense controls to blunt external pressures. Still, the research team said a number of key growth indicators have decelerated in recent years.
Specifically, BMO pointed to declining sales and revenues - which it said were largely driven by foreign-exchange effects - alongside flattening earnings growth and weaker free cash flow generation. On a consolidated basis, Prudential’s revenue has fallen by 21.06% over the last twelve months, according to the firm’s analysis.
Because of these developments, BMO reduced its growth assumptions for the Japan segment, which it estimates contributes roughly 35-40% of Prudential’s total earnings per share. The firm lowered its 2026-27 EPS estimates for the insurer by approximately 1-2%, reflecting the revised Japan outlook.
Despite the downgrades and the Underperform rating, Prudential continues to pay a meaningful dividend. The company yields 4.86% and has preserved dividend payments for 24 consecutive years.
Management and strategic developments
Prudential has been advancing several operational initiatives amid the headwinds. The company upgraded its Advisor Leads program with artificial-intelligence and data-science capabilities intended to improve lead management by generating customer insights and prioritizing higher-potential opportunities.
In addition to product and technology efforts, Prudential restructured portions of its senior leadership to streamline reporting lines. Key leaders now report directly to CEO Andrew Sullivan. Phil Waldeck has been named executive vice president and head of Prudential’s U.S. Businesses, with the appointment effective February 2026.
Other analyst and corporate moves
Separately, Mizuho has initiated coverage of Prudential with a Neutral rating, citing the company’s strong position in the retirement market as a source of longer-term growth potential.
Within Prudential’s asset-management arm, PGIM has entered a joint venture with Lincoln Property Company to acquire outpatient medical properties across the United States. The stated intent of the partnership is to combine Lincoln’s healthcare-sector operating experience with PGIM’s capital and investment platforms.
Outside of Prudential-specific developments, the note referenced a completed M&A-related outcome in the mining sector: Perseus Mining terminated its bid to acquire Predictive Discovery after Robex Resources matched Perseus’s proposal.
Outlook
BMO’s stance rests primarily on evolving risks in Japan and the observable slowdown in top-line and cash-flow metrics, which led to modest EPS downgrades for 2026-27. With the company set to release results imminently, market participants will likely pay close attention to Japan segment performance, free cash flow trends, and any additional commentary from management about regulatory developments and product strategy.