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Prudential first-half figures unlikely to impress

Market expectations are tempered on slow growth and currency exposure.

Prudential logo
Source: Bloomberg

Prudential is due to post its first-half earnings on Tuesday 12 August and the adjusted earnings per share are called to come in at 459p, down from the previous six months' 487p. It is, however, worth taking a moment to assess the previous half- and full-year figures as Prudential has a track record of beating expectations.

The markets are expecting growth in the Asian markets to be limited, and those benefits are likely to be eroded or even wiped out by the unhelpful currency markets and the strength in sterling. In fact like many FTSE 100 companies that have already reported, it is widely expected that currency headwinds will badly dent the company’s profitability.

On top of the currency issue there is also some debate over the company’s earnings multiples, which are considerably higher than the average of its competitors.

Looking at the charts, the share price is just above the 200-day moving average. This is nearly parallel to the longer-term trendline and following the last two weeks sell-off almost indicating the stock as oversold. All three of these facts are likely to entice market support in, and around, the £13.15-13.30 region.

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