Goldman initiates coverage on Prudential Financial
(PRU) and adds to
Analyst Joan Zief says Prudential Financial is
committed to raising its below-trend return on equity
of 6.7% estimated for 2002, and has a targeted 12% in
three to four years. She notes that getting there
will require additional expense saves, a turnaround of
underperforming businesses, and the effective
redeployment of excess capital into higher return
endeavors. Zief says if she sees greater visibility of
8% on her estimated 2003 return on euqity, then in 12
months Prudential could be trading near 1.05 to 1.10
times her estimated 2003 book value of $35.69. She
notes this is equivalent to $38, a 22% upside.
Finally, Zief sees $1.27 2001 EPS, and $2.23 for 2002.