First Take 2Q26 Earnings: Strong Results With Solid EPS Growth

Research evidence excerpt

First Take 2Q26 Earnings: Strong Results With Solid EPS Growth

Update

July 27, 2026 09:43 PM GMT

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

Equity Analyst

First Take 2Q26 Earnings: Bob.Huang@morganstanley.comJie Cheng +1 212 761-6136

Research Associate

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

Strong Results With Solid EPS

Principal Financial Group (PFG.O, PFG US)

Insurance - Life/Annuity | United States of AmericaGrowth

Stock Rating Equal-weight

Industry View Attractive

Specialty Benefits drove the beat: The investment thesis for Principal revolves Price target $112.00

Shr price, close (Jul 27, 2026) $111.29

around its ability to leverage its wholistic offerings across retirement, asset Mkt cap, curr (mm) $24,432

management and protection across multiple jurisdictions, especially in the SMB 52-Week Range $114.90-75.00

space. To this end, the quarter was solid, with multiple segments supporting the

overall EPS growth. Retirement Income Solutions saw solid revenue and earnings

growth. International Pension beat on encaje performance. Specialty Benefits

segment saw strong earnings driven by favorable loss ratio across all products. That

said, overall net flows for RIS and IM segments were below expectations. The

company has seen mixed net flow trend over the past several years. While the

overall results were strong, how the company manages its net flows going forward

will be key.

What We Liked

• Specialty Benefits: Reported pre-tax operating earnings of $159 million

finished better than consensus/MSe of $132/$134 million, on favorable

underwriting experience. Loss ratio of 57.4% was below targeted 60-64%,

driven by improvements across all products.

• International Pension: Reported pre-tax operating earnings of $97 million