Principal Financial Group: 2Q26 First Take: Specialty Benefits Drove Earnings Upside, Net Flows Weak

Research evidence excerpt

Principal Financial Group: 2Q26 First Take: Specialty Benefits Drove Earnings Upside, Net Flows Weak

J P M O R G A N North America Equity Research

27 July 2026

Principal Financial Group Neutral

PFG, PFG US

2Q26 First Take: Specialty Benefits Drove Earnings Price (27 Jul 26):$111.29

Upside, Net Flows Weak

Insurance - Life & Nonlife

PFG reported a mixed quarter. Upside in core earnings was driven by favorable Pablo S. Singzon AC

claims experience in specialty benefits, while results in other segments mostly (1-212) 622-2295

offset each other. Net flows were poor across the board, although significant pablo.s.singzon@jpmorgan.com

outflows in asset management were implied by PFG’s July 20 AUM disclosure. Kevin Wijendra

(1-212) 622-7054

• EPS better than expected, upside mostly from specialty benefits. 2Q26 kevin.wijendra@jpmorgan.com

adjusted EPS of $2.50 was higher than our $2.36 estimate and consensus of J.P. Morgan Securities LLC

$2.33. Variable investment income was slightly below PFG’s long-term

expectation but still favorable to our model estimate (+$0.05), while encaje

2Q26 Results

was the opposite as it was above PFG’s long-term assumption but below our

model estimate (-$0.01). Normalizing for these items, adjusted EPS would Adjusted EPS: $2.50A vs.$2.36E

have been $2.46. On a normalized basis, higher earnings in RIS and Adj. Op. Income: $547 mil. vs. $518 mil.E

international pensions were offset by shortfalls in individual life and corporate, Net Inv. Inc.: $1,398 mil. vs. $1,309 mil.E

leaving specialty benefits as the main driver of PFG’s favorable earnings Buybacks: $250 mil. vs. $216 mil.E

variance this quarter. Net flows were weak across all relevant segments,

including RIS (-$3.0 billion vs. our -$2.0 billion estimate), investment