Timing clarification: Principal Financial Group will release second-quarter results after the market closes today, Monday, July 27, 2026—not tomorrow. Management’s conference call is scheduled for Tuesday, July 28, at 10:00 a.m. ET. (investors.principal.com)
| Item | Expectation / latest data |
|---|---|
| Consensus adjusted EPS | ~$2.32 |
| Consensus revenue | ~$4.1B |
| Implied EPS growth | ~7% YoY |
| Preannounced total AUM | $808.0B |
| Investment Management AUM | $601.9B |
| International Pension AUM | $168.5B |
| 2026 adjusted EPS growth target | 9%–12% |
| PFG close, July 24 | $109.43 |
| 2026 share-price change through July 24 | +22% |
Consensus is clustered around adjusted EPS of $2.32 and revenue of approximately $4.1 billion, with the EPS estimate implying roughly 7% year-over-year growth. The full-year consensus is near $9.40, approximately the midpoint of management’s target range. (benzinga.com)
The setup is constructive, but expectations have risen. PFG shares have advanced about 22% this year and nearly 13% since the previous earnings release. Meanwhile, the company has already disclosed strong quarter-end AUM.
That shifts the debate away from whether markets helped earnings and toward three harder questions:
A modest EPS beat driven by markets, foreign exchange or unusually favorable claims may not be enough to move the stock materially higher. A higher-quality result would combine positive or improving net flows, resilient underwriting, progress on variable investment income and continued capital returns.
PFG preannounced second-quarter total AUM of $808 billion, up almost 5% sequentially from approximately $770 billion at March 31. Investment Management AUM reached $601.9 billion and International Pension AUM reached $168.5 billion. Those figures are approximately 1% and 4% above recently published consensus estimates, respectively. (tipranks.com)
The caveat is important: management said market performance, foreign exchange and other non-flow items added approximately 6.4% of beginning AUM during the quarter. In other words, the headline AUM gain was largely market- and currency-supported rather than proof of strong organic asset gathering. (tipranks.com)
First-quarter Investment Management gross sales reached a record $37 billion, but redemptions in a concentrated group of U.S. active-equity funds kept the overall flow picture less impressive. Management expected redemptions to normalize and the unfunded mandate pipeline to support improvement during the rest of 2026. Investors will want concrete evidence that this is beginning to occur.
Best outcome: positive nonaffiliated flows and meaningful pipeline funding accompanying the strong AUM figure.
Less favorable outcome: higher AUM and fee revenue, but persistent net outflows that suggest earnings remain overly dependent on markets.
Benefits & Protection was the principal source of first-quarter upside. Specialty Benefits produced a 58.5% loss ratio and a 16.2% margin, while Life Insurance delivered a 15.6% margin due to unusually favorable mortality. Management explicitly characterized some of the Life result as positive volatility and indicated that full-year Life margins were more likely to land toward the lower end of the 12%–16% target range. (investors.principal.com)
There is also normal seasonality to consider. Management said the second quarter is generally the highest-utilization quarter for Dental, which should push the overall Specialty Benefits loss ratio higher sequentially.
A sequential increase in the loss ratio would not necessarily be disappointing. The more relevant tests are:
Specialty Benefits sales grew 24% in the first quarter, but premium-and-fee growth was only 3.6%. Management expected revenue growth to strengthen, particularly in the second half. An acceleration in premium growth without material deterioration in claims would be one of the cleanest positive signals in the report.
Retirement and Income Solutions entered the quarter with good momentum:
However, management cautioned that first-quarter transfer activity benefited from large-case wins and that the first quarter is typically the strongest period for sales and deposits. The 41.5% margin was also slightly above the company’s 38%–41% target range because of favorable seasonality and timing.
RIS does not need another $12 billion transfer-deposit quarter. A better indicator of franchise health would be continued recurring-deposit growth, positive SMB flows and stable retention without sacrificing pricing.
First-quarter reported non-GAAP operating EPS was $2.07, but EPS excluding significant variances was $2.17. The principal drag was lower variable investment income, partly because there were no real-estate transactions during the quarter.
Management said it expected real-estate transaction activity to pick up in the second through fourth quarters and continued to forecast better full-year variable investment income in 2026 than in 2025.
This creates potential upside, but also makes earnings quality more complicated:
Investors should compare both reported operating EPS and EPS excluding significant variances rather than relying on the headline figure alone.
PFG ended the first quarter with approximately $1.45 billion of excess and available capital, including:
The company returned $374 million during the first quarter, including $200 million of repurchases, and raised its quarterly dividend to $0.82 per share. (investors.principal.com)
The second-quarter report should provide updates on:
With the stock having appreciated materially, investors may also ask whether management intends to maintain the recent pace of buybacks or redirect more capital toward organic and inorganic growth.
PFG has emphasized that most of its private fixed-income holdings are investment grade and that direct-lending exposure is limited. Management also said portfolio performance remained better than long-term expectations in the first quarter.
Nevertheless, private assets remain a likely discussion topic given elevated long-term yields and continued investor scrutiny of insurers’ less-liquid holdings.
Watch for:
Higher rates can improve new-money investment yields and spread earnings over time, but sharp rate moves also create valuation, credit and policyholder-behavior risks. The quality of PFG’s portfolio commentary may therefore matter nearly as much as the quarter’s realized credit losses.
A clearly positive report would likely contain several of the following:
PFG enters the report with visible market-driven tailwinds, strong preannounced AUM and solid first-quarter execution. The company appears well positioned to meet its 2026 adjusted EPS-growth target, and the roughly $9.40 full-year consensus sits near the midpoint of management’s implied $9.32–$9.58 range. (investors.principal.com)
The central issue is no longer the headline AUM figure. Investors should focus on the underlying mix:
Given the stock’s strong year-to-date performance, the bar is higher than it was in April. A clean beat with improving asset-management flows and resilient Benefits results could support further upside. A merely in-line quarter driven primarily by markets may be received more cautiously.