JPMorgan’s Downgrade on Relative Value Might Change The Case For Investing In Principal (PFG)

• In early January 2026, JPMorgan downgraded Principal Financial Group’s stock rating from Overweight to Neutral, while maintaining a cautiously positive view on the company’s fundamentals.
• The bank’s move was driven more by seeing comparatively better value in other life insurers than by any deterioration in Principal’s outlook, which still includes an upbeat view on asset management flows.
• With JPMorgan’s downgrade emphasizing relative value within life insurers, we’ll examine how this reassessment interacts with Principal’s existing investment narrative.

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Principal Financial Group Investment Narrative Recap

To own Principal Financial Group, you have to believe in its role as a diversified retirement, asset management, and insurance provider that can keep growing fee-based businesses while controlling costs. JPMorgan’s downgrade highlights relative valuation versus other life insurers but does not materially change the near term catalyst around asset management flows or the key risk from continued net outflows and fee pressure.

Against that backdrop, Principal’s recent third quarter 2025 results, which exceeded earnings expectations and were accompanied by optimistic guidance, matter more to the story than the rating change itself. Those results reinforced the importance of stabilizing flows and improving revenue quality in asset management, which remains central to how near term catalysts and cash flow risks could play out for shareholders.

Yet investors should be aware that if fee related cash flows stay pressured by ongoing net outflows and risk off client behavior...

Read the full narrative on Principal Financial Group (it's free!)

Principal Financial Group's narrative projects $18.8 billion revenue and $2.2 billion earnings by 2028. This requires 7.5% yearly revenue growth and roughly a $1.1 billion earnings increase from $1.1 billion today.

Uncover how Principal Financial Group's forecasts yield a $89.08 fair value, in line with its current price.

Exploring Other Perspectives

Four fair value estimates from the Simply Wall St Community range from about US$89 to extremely high outliers in the tens of billions, showing just how far apart personal models can be. Against this backdrop of differing views, Principal’s sensitivity to asset management flows and client risk appetite may be a key factor you want to stress test in your own expectations for the business.

Explore 4 other fair value estimates on Principal Financial Group - why the stock might be worth just $89.08!

Build Your Own Principal Financial Group Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your Principal Financial Group research is our analysis highlighting 4 key rewards that could impact your investment decision.
• Our free Principal Financial Group research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Principal Financial Group's overall financial health at a glance.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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