Broker snap: Slowdown expected at Pru, says Nomura

6th Mar 2012 10:51

Nomura has reiterated its reduce rating and 700p target price for insurance giant Prudential ahead of the group's full-year results next Tuesday."Following 2.5 years of strong growth in the US, we expect a slowdown in US sales to restrict total group [net book value] growth to 5% in 2011 and to single-digit levels in 2012 and 2013," the broker said.Nomura believes that Pru's US business is likely to "plateau" due to the companies intention to moderate its US growth ("since it was becoming too large a part of the group") and its demanding comparatives over the past three years.Furthermore, in Asia, the broker expects double-digit growth for Pru's peer group (AIA, China Life, Ping An), compared with a slowdown for Pru."We think this divergence in growth will serve to limit the market's appetite for Pru as an Asian growth stock, since it will become clearer that the stock is still highly geared to its US and UK businesses."BC