2Q26 AUM Update Positive, but Net Flow Trends Remain a Concern

Research evidence excerpt

2Q26 AUM Update Positive, but Net Flow Trends Remain a Concern

Update

July 20, 2026 10:49 PM GMT

Morgan Stanley & Co. LLCMPrincipal Financial Group | North America Bob Jian Huang

Equity Analyst

2Q26 AUM Update Positive, but Bob.Huang@morganstanley.comJie Cheng +1 212 761-6136

Research Associate

Jie.Cheng1@morganstanley.com +1 212 761-3878

Net Flow Trends Remain a

Principal Financial Group (PFG.O, PFG US)

Insurance - Life/Annuity | United States of AmericaConcern

Stock Rating Equal-weight

Industry View Attractive

While 2Q26 AUM came in largely in line with expectations, we Price target $112.00

Shr price, close (Jul 20, 2026) $112.06

estimate weaker net flows across both Investment Management Mkt cap, curr (mm) $24,601

52-Week Range $114.90-75.00

and International Pension than consensus.

Principal pre-announced its AUM of $808 billion as of 2Q26. Investment

Management (IM) AUM of $601.9 billion came in modestly below consensus of

$603.8 billion, while International Pension (IP) AUM of $168.5 billion exceeded

consensus of $162.8 billion.

Flows appear challenged. Management disclosed that market appreciation, foreign

exchange, and other non-flow items contributed a 6.4% positive impact relative to

beginning AUM. Based on this disclosure, we estimate IM net outflows of ~$(13)

billion, versus consensus expectations of $(1.7) billion, and IP net outflows of ~

$(1.3) billion, compared with consensus of $(0.1) billion. We note that the 6.4%

positive impact was disclosed at the total company AUM level ($808 billion). As

Principal did not provide segment-level detail, our estimates assume a similar

market impact across IM and IP, although actual segment impacts may differ.

We are updating our 2026/2027/2028 EPS estimates to $9.33/$10.27/$11.27 from