Prudential (PRU) recently made a significant move by purchasing 740,000 of its shares on the London Stock Exchange as part of its $2bn share buyback program. Share buybacks can indicate that management believes the stock is undervalued, although critics argue it can also artificially inflate earnings per share. Despite the criticism, Prudential’s decision may be seen as a positive move given the 18% drop in market value over the past year.

Baroness Shriti Vadera, the group chair, expressed her concern over the declining share price at the group’s AGM held in Hong Kong. The company’s focus has shifted towards Asia and Africa, regions with significant growth potential due to low insurance penetration rates. However, recent economic uncertainties in China, including trade tensions with the US, have impacted market sentiment.

Despite these challenges, Prudential remains optimistic about its long-term growth prospects. The company expects annual growth in new business profit and has seen an increase in funds under management. Analysts covering the stock have mostly positive recommendations, with a potential upside in the target price and a low PEG ratio indicating undervaluation.

UBS analysts have highlighted investor concerns around China as a key factor in Prudential’s underperformance. They suggest a target price of 1,270p, with operational improvements and the closure of the valuation discount with AIA driving potential upside. The overall outlook for Prudential remains positive, with the company poised for growth despite current challenges in the market.

Overall, Prudential’s strategic moves and focus on growth markets position it well for the future. Investors can look forward to the company’s continued performance and potential for value appreciation.