Prudential PLC (LSE:PRU) shares offer “tremendous long-term value”, Deutsche Bank said in an analyst note today.
The bank issued a 'buy' idea on the life insurer to clients this morning, amid the easing of restrictions in China and Hong Kong.
Shares in the Pru are trading at ten times estimated earnings for 2023, said DB Research analyst Oliver Steel.
The note forecast growth of two times faster than other firms in the sector, with future earnings growth estimated at 10% per year, giving the FTSE 100 company a 7% premium over most European insurers.
As a result, Prudential shares offer a price to earnings upside of 40% when compared to competitor AIA Group.
Steel said that the London-listed company's weak share price was driven by out-of-the-ordinary Covid-19 restrictions in Hong Kong and China and the loss of its chief executive.
A fortnight ago, the insurer said that Anil Wadhwani will take the mantle as chief executive from February 2023, providing much-needed clarity, which together with the easing of Covid-19 restrictions in China and Hong Kong bodes well for the firm.
New daily cases of Covid-19 have fallen below 100 since the middle of April, with Shanghai being back to business as usual this month and Beijing also easing restrictions this week, though the Hong Kong border is unlikely to reopen this year.