Lead
Mizuho has trimmed its price target on Prudential Financial to $113.00 from $126.00 while keeping a Neutral rating on the insurance company. Prudential shares were trading around $102.18 and the company carries a price-to-earnings ratio of 10.28. The stock experienced a recent decline of 4.65% over the prior week.
Trigger for the downgrade
The move follows Prudential's decision to suspend new sales at Prudential of Japan (PoJ) for 90 days. The suspension was instituted in response to previously disclosed incidents of employee misconduct related to inappropriate investment solicitations. Management has estimated the operational pause will lower pretax earnings by $300-350 million.
Mizuho's analysis indicates the sales suspension will subtract about $0.70 from earnings per share, with the impact concentrated in the first half of 2026 but with lingering effects through the remainder of 2026 and into 2027.
Updated earnings and valuation outlook
Reflecting the disruption in Japan, Mizuho reduced its 2026 earnings estimate for Prudential by 6% to $14.00 per share. The bank attributes roughly 80% of that reduction to the PoJ sales suspension. For 2027, Mizuho trimmed its EPS forecast by 3%, citing slower asset under management growth, weaker net flow assumptions, and continued elevated policy surrenders in Japan tied in part to yen weakening.
Despite the lower price target, Mizuho noted that the $113.00 objective still implies about a 15% potential return from current levels and therefore retained its Neutral stance. However, the firm pointed to earnings revision headwinds for 2026 and 2027, and its estimates now sit approximately 4% and 1% below consensus for those respective years.
Dividend, valuation and additional metrics
The company currently offers a dividend yield of 5.48% and has maintained dividend payments for 25 consecutive years, a consistency that may provide some income stability amid operating challenges. A fair value assessment referenced in available data suggests the stock is slightly undervalued relative to that metric.
Other analyst and company activity
Separately, BMO Capital has reiterated an Underperform rating on Prudential Financial, highlighting concerns about the company's Japan operations amid macro volatility and regulatory attention. On the product and distribution side, Prudential Advisors has enhanced its lead management program by integrating artificial intelligence and data science to bolster customer insights and conversion potential.
Prudential Financial has also realigned senior leadership, with key leaders now reporting directly to CEO Andrew Sullivan. Phil Waldeck was named executive vice president and head of Prudential’s U.S. businesses, effective February 2, 2026. In addition, Mizuho has initiated coverage on the company with a Neutral rating, pointing to Prudential's strong positioning in the retirement market and highlighting its retirement product suite and wholly owned asset manager, PGIM, as strategic strengths.
Japan-specific operational actions and timing
Prudential of Japan announced that the 90-day suspension of new sales activities will begin on February 9, 2026. The company said the pause is intended to enable comprehensive adjustments to operations, organizational structure, and governance following the employee misconduct incidents.
Bottom line
Mizuho's reduced price target and lowered earnings forecasts reflect a material near-term earnings hit from the Prudential of Japan sales suspension and the knock-on effects to asset growth and surrender behavior. While dividend continuity and retirement market positioning are cited as offsets, the firm retained a Neutral rating amid what it describes as near-term revision risk for 2026 and 2027.