Valued at a market cap of $17.3 billion, Principal Financial Group, Inc. (PFG) is a global investment management company based in Des Moines, Iowa. It offers a wide range of financial products and services, including retirement, asset management, and insurance products and services to businesses, individuals, and institutional clients. 

Shares of this asset management company have lagged behind the broader market over the past 52 weeks. PFG has declined 7.1% over this time frame, while the broader S&P 500 Index ($SPX) has gained 10.1%. Meanwhile, on a YTD basis, the stock is down marginally, fairly in line with the SPX. 

Narrowing the focus, PFG has also underperformed the Financial Select Sector SPDR Fund’s (XLF) 19.8% uptick over the past 52 weeks and 3.9% return on a YTD basis. 

On Apr. 24, PFG delivered its Q1 results, and shares of the company plunged 2.1% in the following trading session. Its adjusted operating earnings of $1.81 per share grew 9.7% from the year-ago quarter but missed the consensus estimates by 2.2%. Lower investment management segment’s operating margin, impacted by elevated seasonal expenses, along with increased pre-tax operating losses in the corporate segment, driven by lower net investment income and higher operating costs somewhat affected its otherwise strong performance and led to its earnings miss. Additionally, the company’s assets under management rose 1.3% from the year-ago period, reaching $717.9 billion.

For the current fiscal year, ending in December, analysts expect PFG’s EPS to grow 15.6% year over year to $8.06. The company’s earnings surprise history is disappointing. It fell short of the consensus estimates in each of the last four quarters. 

Among the 14 analysts covering the stock, the consensus rating is a “Hold” which is based on four “Strong Buy,” seven “Hold,” one “Moderate Sell,” and two “Strong Sell” ratings. 

This configuration is less bearish than three months ago, with three analysts suggesting a “Strong Sell” rating. 

On May 21, Piper Sandler Companies (PIPR) analyst John Barnidge maintained a “Buy” rating on PFG and set a price target of $88, which indicates a 13.8% potential upside from the current levels. 

The mean price target of $83.15 represents a 7.5% premium from PFG’s current price levels, while the Street-high price target of $99 suggests an upside potential of 28%.