Prudential’s fourth quarter saw a significant negative market reaction, as management addressed both operational progress and notable headwinds. The most consequential development was the voluntary 90-day suspension of new sales in Prudential of Japan (POJ) following internal findings of employee misconduct—a decision taken in consultation with Japanese regulators. CEO Andy Sullivan emphasized the company’s commitment to restoring trust, stating, “We are committed to restoring the standing that has long set us apart in that market.” Meanwhile, core U.S. businesses benefited from higher spread income and improved underwriting, but these positives were offset by continued client outflows in active asset management, particularly at Jennison, and the broader industry trend toward passive investment solutions.

Is now the time to buy PRU? Find out in our full research report (it’s free for active Edge members).

While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.

Our Top 5 Analyst Questions From Prudential’s Q4 Earnings Call

• Suneet Kamath (Jefferies) asked about the rationale and regulatory involvement in the 90-day POJ sales suspension. CEO Andy Sullivan explained the voluntary nature of the decision and confirmed ongoing consultation with Japan’s FSA.
• Thomas Gallagher (Evercore ISI) inquired about retention of Life Planners and compensation strategies during the suspension. Sullivan said training and financial support measures were implemented to preserve this key distribution channel.
• Wesley Carmichael (Wells Fargo) questioned the drivers of increased surrender rates and their financial impact. CFO Yanela Frias attributed the uptick mainly to yen volatility and clarified that most FX-sensitive customers had already surrendered.
• Jian Huang (Morgan Stanley) challenged whether a 90-day suspension would be sufficient to restore public trust. Sullivan responded that the period reflects the time needed for remediation, but the company will extend if necessary to ensure full compliance.
• Tracy Benguigui (Wolfe Research) asked about the long-term earnings impact of pausing new business in Japan. Frias explained that the modeling assumes a slow ramp-up in sales post-suspension, with POJ sales expected to be 50% lower in 2026 than normal levels.

Catalysts in Upcoming Quarters

In future quarters, the StockStory team will closely watch (1) the pace and effectiveness of Prudential’s compliance remediation and sales recovery in Japan, (2) the success of PGIM’s efforts to stem outflows and expand into private credit and ETF products, and (3) progress in streamlining U.S. operations and sustaining growth in retirement and group insurance. Shifts in macroeconomic factors, especially yen volatility, will also be important to monitor.

Prudential currently trades at $102.38, down from $107.18 just before the earnings. In the wake of this quarter, is it a buy or sell? See for yourself in our full research report (it’s free).

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