In the wake of Prudential PLC (LSE:PRU)'s third-quarter numbers, investment bank Jefferies has repeated its bullish stance on the UK savings and pension heavyweight.
In a note to clients, it said the shares are worth 1,950.00p each, marking an impressive 117% premium to the current price.
Jefferies' analysis highlights Prudential's robust performance, noting a 37% year-on-year growth in new business profit (NBP) for the first nine months of 2023.
This figure closely mirrors the growth trajectory of Asian insurance giant AIA and even outpaces it when economic impacts are excluded, with Prudential's NBP rising by 48%.
The firm's agency annual premium equivalent (APE) saw an 81% increase, with NBP following suit at 62%, significantly overshadowing the 3% growth in bancassurance. This divergence from AIA's partnership-led growth may be attributed to the strength of CITIC-Prudential's sales during the previous year's lockdowns.
Prudential's product mix has also evolved, with health and protection now making up 37% of NBP, reflecting a consumer shift towards savings products—a trend also observed by AIA.
The quarterly analysis provided by Jefferies reveals a picture of stability and growth for Prudential, with the first quarter often being the strongest.
However, year-on-year growth was higher in subsequent quarters. The company's strategic moves in the Asian markets, particularly in Hong Kong, suggest it is successfully capturing market share from competitors such as Manulife and FWD.
Jefferies also points to Prudential's performance in mainland China, where APE has declined due to a strong previous year and regulatory changes. However, the company's operations in Indonesia are benefiting from repricing strategies, and in Singapore, new bancassurance products are driving growth.
Moreover, Prudential's asset management arm, Eastspring, has recorded net inflows of $2.1 billion year-to-date, excluding M&G, indicating healthy investment activity.
In afternoon trade, the stock was up 3.4p at 902.8p.