Deutsche Bank has nudged up its price target on Prudential PLC (LSE:PRU) ahead of next week's first-quarter trading update but is keeping its rating at 'hold', saying recent gains have brought the insurer’s valuation closer to fair value.
The bank raised its target price from 870p to 900p, noting that life and pensions giant shares have rebounded strongly since early April, delivering an 8% total return over the past week and 25% year-to-date.
That performance, Deutsche says, has been driven by broad improvements in both top- and bottom-line performance, as well as a strong start to 2025.
Analyst Rhea Shah has also factored in a notional $2bn of share buybacks across 2026–27, pointing to Prudential’s high free surplus ratio, which remains above the company’s 175–200% target range.
While this is not a firm forecast, it reflects expectations that the group will announce further capital returns during its capital management update in August.
Despite these positives, Deutsche is staying cautious. Shah flags continued macro and geopolitical risks, particularly in Asia where Prudential operates, and says the valuation is no longer as compelling.
The stock now trades at a 25% discount to peer AIA on forward price-to-earnings, down from a 50% discount in recent months.
Progress towards Prudential’s 2027 targets remains on track, but investors hoping for further upside may need to wait for greater clarity on capital returns and emerging market growth momentum.