Prudential Financial (NYSE:PRU) is scheduled to announce its earnings on April 30, 2025. The consensus anticipates earnings of approximately $3.18 per share for the quarter, an increase from $3.12 in the same quarter last year. Recently, the company has been experiencing relatively strong momentum in its global investment, insurance, and retirement sectors. Specifically, the asset management division has been performing well, driven by higher assets under management and increased net inflows. As of Q4, assets under management reached $1.512 billion, reflecting an approximate 4% increase year-over-year. However, there is a chance that Q1 could have faced some challenges due to the stock market correction and the uncertainty arising from the trade conflict between the U.S. and major trading partners.
Prudential has a current market capitalization of $37 billion. Over the past twelve months, revenue totaled $71 billion with a net income of $2.7 billion. For those seeking upside while experiencing lower volatility than individual stocks, the Trefis High-Quality portfolio offers an alternative, having outperformed the S&P 500 and produced returns exceeding 91% since its inception.
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Prudential Financial’s Historical Odds Of Positive Post-Earnings Return
Here are some insights on one-day (1D) post-earnings returns:
- There have been 20 earnings data points recorded over the last five years, with 9 positive and 11 negative one-day (1D) returns noted. Overall, positive 1D returns occurred approximately 45% of the time.
- However, this percentage drops to 42% when considering data from the past 3 years instead of 5.
- The median of the 9 positive returns = 2.5%, while the median of the 11 negative returns = -2.6%
Further data for observed 5-Day (5D) and 21-Day (21D) returns after earnings is summarized along with the statistics in the table below.
Correlation Between 1D, 5D, and 21D Historical Returns
A relatively lower-risk strategy (though less effective if the correlation is low) is to analyze the correlation between short-term and medium-term returns following earnings, identify pairs that exhibit the highest correlation, and execute the suitable trade. For instance, if 1D and 5D show the strongest correlation, a trader can position themselves “long” for the following 5 days if the 1D post-earnings return is positive. Here is some correlation data based on 5-year and 3-year (more recent) histories. Note that the correlation 1D_5D refers to the relationship between 1D post-earnings returns and subsequent 5D returns.
Is There Any Correlation With Peer Earnings?
At times, the performance of peers can influence how a stock reacts post-earnings. In fact, price adjustment may commence before the earnings announcements are made. Below is some historical data comparing the post-earnings performance of Prudential Financial stock with that of peers who reported earnings just before Prudential Financial. For a fair comparison, peer stock returns also represent post-earnings one-day (1D) returns.
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