JP Morgan has placed Prudential PLC (LSE:PRU) on positive catalyst watch ahead of its first-half results, expecting reassurance on the impact of a Chinese regulatory change.
The broker reiterated its 'overweight' rating on the insurer ahead of results due on 26 August.
Analyst Farooq Hanif said Prudential remained unjustifiably inexpensive, trading at a discount to European insurers.
He argued that the shares were already pricing in a bear case for new business sales to Mainland Chinese visitors in Hong Kong.
Those customers buy offshore life insurance products in the territory, a market that has come under scrutiny following the introduction of Decree 837.
JPM expects Prudential management to make reassuring statements about the decree's effect on demand so far.
The broker trimmed its earnings forecasts, cutting estimated earnings per share by around 1% for 2026 and about 3% for 2027.
Hanif said the changes reflected modelling updates, mainly to net investment returns in the insurance business, market movements and adjustments to forecasts for the Eastspring asset management arm.
Those Eastspring changes follow a reduction in Prudential's stake in ICICI Prudential Asset Management to 35%.
Despite the cuts, JPM said its forecasts remained ahead of consensus.
