Prudential PLC (LSE:PRU) shares climbed 2% in afternoon trading on Thursday as the insurer forecast double-digit growth in new business profit for 2025, following a strong performance last year.
The Asia-focused company, listed in London and Hong Kong, posted an 8% rise in adjusted operating profit before tax to $3.13 billion, with new business profit up 11% to $3.08 billion.
Growth was driven by Hong Kong, Indonesia, and Singapore, although profits in mainland China dipped 1% amid economic challenges.
Prudential plans to increase dividends per share by at least 10% this year and has accelerated its $2 billion share buyback, now set to conclude in 2025.
Analysts highlighted the insurer’s guidance for over 10% growth across key metrics.
Despite a 20% rally this year, Pru shares remain lowly valued at 0.6 times embedded value (EV) or 10 times forecast 2025 earnings.
Panmure Liberum argues the stock should be trading higher, given management’s confidence in delivering over 10% growth in new business profit, earnings, cash generation, and dividends this year.
It repeated its 'buy' advice and 1,610p price target. KBW reckons the stock is worth 1,025p underpinning its 'overweight' call.
"We continue to believe that the risk/reward in the share price is good in this regard, but doubt this print catalyses that expectation," said KBW.
"Prudential anticipates [more than] 10% new business value growth in 2025. Consensus seems to expect 14%, so they will probably need to over-deliver to impress."
In afternoon trading, the stock was up 16.6p at 790.8p.