Principal Financial's 2026 Outlook: A Test of Momentum for Investors

DES MOINES, IA – January 02, 2026 – All eyes in the financial sector will turn to Principal Financial Group (Nasdaq: PFG) in early February, as the global investment manager prepares to release its fourth-quarter and full-year 2025 results. More critically, the company will unveil its strategic outlook for 2026, providing a crucial test of its recent growth momentum against a backdrop of evolving economic conditions and mixed signals from Wall Street.

The formal announcement is scheduled for after U.S. markets close on Monday, February 9, 2026. The following morning, on February 10, Chair, President, and CEO Deanna Strable and CFO Joel Pitz will lead a conference call to dissect the numbers and articulate their vision for the year ahead. For investors and market analysts, this event is more than a routine earnings report; it's a key barometer for the health of the asset management and insurance industries.

A Year of Consistent Performance

Principal enters this pivotal announcement on the back of a remarkably consistent 2025. The company has methodically posted strong quarterly results, largely meeting or exceeding analyst expectations. Through the first three quarters of the year, Principal demonstrated robust growth in non-GAAP operating earnings per diluted share, with increases of 10%, 18%, and 13% year-over-year, respectively. This performance has kept the firm on track to meet its long-term growth targets and has been fueled by what management describes as solid business fundamentals and disciplined expense management.

Assets under management (AUM) have seen a steady climb, growing from $718 billion in the first quarter to $784 billion by the end of the third. This growth reflects not only favorable market conditions but also the strength of the company's core businesses, particularly its retirement ecosystem and solutions for small and mid-sized businesses. Furthermore, Principal has maintained a disciplined approach to capital management, consistently returning value to shareholders. In 2025 alone, the company has returned over $1 billion to shareholders through a combination of share repurchases and steadily increasing common stock dividends, signaling confidence from the top.

This track record builds upon a solid foundation from 2024, where the company saw an 11% increase in non-GAAP operating EPS and returned $1.7 billion to shareholders. The upcoming report will reveal whether this powerful momentum carried through the final quarter of 2025.

Navigating Analyst Caution and Market Headwinds

Despite the strong operational performance, the sentiment from the analyst community is one of measured caution. The consensus rating for PFG stock currently hovers around a "Hold," with an average one-year price target suggesting only modest upside from its current position. This tempered enthusiasm was recently underscored on January 5, 2026, when JPMorgan downgraded Principal's stock from "Overweight" to "Neutral."

Significantly, the downgrade was not attributed to a fundamental flaw in Principal's strategy but rather to the perception of better relative value in other life insurance stocks. The bank's analysts still acknowledged the company's "superior business mix, with lower tail risk, a higher ROE, and better free cash flow than most life insurance peers." This nuanced view captures the central question for investors: Is Principal's high-quality, stable business model enough to warrant a premium in a market searching for higher growth?

Analysts are projecting full-year 2025 earnings per share of around $8.14. The 2026 forecast will be scrutinized against expectations of 7.29% revenue growth and 22.8% earnings growth for the year. While substantial, this earnings growth forecast trails the broader U.S. Asset Management industry's average, placing pressure on management to justify their strategic direction during the upcoming call.

A Barometer for a Sector in Flux

Principal's 2026 outlook will serve as a lens through which to view the entire financial services industry, a sector currently navigating a period of profound transformation. The macroeconomic environment presents a complex picture. While investment yields are expected to rise slightly, potential interest rate cuts by the Federal Reserve later in the year could compress margins. At the same time, persistent inflation and geopolitical uncertainty remain significant risks that could impact market volatility and AUM growth.

Internally, the industry is grappling with disruptive technological shifts. The integration of artificial intelligence in everything from underwriting to customer service is accelerating, with AI adoption in finance projected to hit 85% by 2026. Firms that fail to invest in digital transformation, hyper-personalization, and enhanced cybersecurity risk being left behind. Principal’s commentary on its technology investments and digital strategy will be a key indicator of its preparedness for this new landscape.

In the insurance segment, climate change is forcing a re-evaluation of risk, while the growth of specialty lines like cyberinsurance presents both challenges and opportunities. Global premium growth is expected to slow, intensifying competition and putting pressure on firms to innovate and manage costs effectively. How Principal plans to navigate these industry-wide currents—from fee pressure in asset management to the modernization of its insurance operations—will be a central theme of the February 10th call.

Investors and stakeholders will be listening intently to Deanna Strable and Joel Pitz for insights into their strategic priorities. Key questions will revolve around their plans to sustain earnings growth, manage expenses in an inflationary environment, and allocate capital effectively. Their commentary on market positioning, competitive advantages, and future growth drivers will set the tone for Principal's stock performance and its narrative for the year ahead.