Markets & Finance

Goldman Adds Prudential to Recommended List

Goldman initiates coverage on Prudential Financial

(PRU) and adds to

recommended list.

Analyst Joan Zief says Prudential Financial is

committed to raising its below-trend return on equity

of 6.7% estimated for 2002, and has a targeted 12% in

three to four years. She notes that getting there

will require additional expense saves, a turnaround of

underperforming businesses, and the effective

redeployment of excess capital into higher return

endeavors. Zief says if she sees greater visibility of

8% on her estimated 2003 return on euqity, then in 12

months Prudential could be trading near 1.05 to 1.10

times her estimated 2003 book value of $35.69. She

notes this is equivalent to $38, a 22% upside.

Finally, Zief sees $1.27 2001 EPS, and $2.23 for 2002.

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