Prudential PLC Earnings: Solid Numbers With Strong Rebound in Hong Kong; Shares Undervalued

Prudential PLC PRU reported earnings for the first half of 2023. We believe these earnings are good. Our full-year earnings estimate for Prudential is $1.8 billion in net income. In the Aug. 30 disclosures for the first half of the year, the business reported net income of $944 million and this implies net income of $1.9 billion for the full year. Versus the 11% cost of equity that we apply, Prudential’s results on Aug. 30 suggest that the company is earning exactly this. Prudential announced a $0.0626 dividend per share. That dividend is a 9% increase on the interim dividend paid last year, in line with its 7% to 9% dividend growth target.

We lower our fair value estimate to GBP 13.20 per share as we have revisited some of our growth, margin, and currency assumptions. We maintain our no-moat rating.