Prudential PLC (LON:PRU) saw its shares rise on Monday even as Deutsche Bank trimmed its price target for the blue-chip stock, with the bank still concluding the insurer is a “quality business - cheaply rated”.
In a note to clients, Deutsche Bank’s analysts said: “We came away from Prudential's investor conference last week more confident as to the group's medium and long-term growth prospects - in both Asia and the US.”
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They added: “Against this, the increasing gap between reported profits and capital generation in the US does need to be reflected more overtly in our valuation.”
The analysts reduced their target price for Pru to 2,100p, down from 2,225p previously, an 8% cut to reflect a lower US valuation.
But they pointed out that with around 30% implied upside, Pru’s shares still appear too cheaply rated.
The analysts concluded that the group “remains one of the best-positioned companies in the sector, and we remain buyers.”
In late morning trading, Pru shares were 0.4% higher at 1,563p.