Sell Prudential Financial Stock Ahead Of Upcoming Earnings?

Prudential Financial (NYSE:PRU) is expected to report its earnings on Wednesday, July 30, 2025. Revenues for the quarter are projected at about $13.4 billion per consensus estimates, down 3% year-over-year, while earnings are expected to come in at around $3.23 per share, down slightly compared to last year. The company’s U.S. insurance operations will remain a key driver of earnings for the quarter. Over Q1, the business saw better underwriting and lower costs, although some areas saw weaker investment and fee related income.

The company’s global investment management business should fare well this quarter as assets under management likely rise driven by equity market appreciation, net inflows, and stronger investment performance. The U.S. stock markets soared to all-time highs in late June, with the S&P 500 up almost 11% over Q2 2025 amid signs of the trade war between the U.S. and key trading partners easing.

The company has $37 billion in current market capitalization. Revenue over the last twelve months was $61 billion,  and net income stood at $2.3 billion. While a lot will depend on how results stack up against consensus and expectations, understanding historical patterns might just turn the odds in your favor if you are an event-driven trader.

There are two ways to do that: understand the historical odds and position yourself prior to the earnings release, or look at the correlation between immediate and medium-term returns post earnings and position yourself accordingly after the earnings are released. That said, if you seek upside with lower volatility than individual stocks, the Trefis High Quality portfolio presents an alternative – having outperformed the S&P 500 and generated returns exceeding 91% since its inception.

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Prudential Financial’s Historical Odds Of Positive Post-Earnings Return

Some observations on one-day (1D) post-earnings returns:

• There are 20 earnings data points recorded over the last five years, with 9 positive and 11 negative one-day (1D) returns observed. In summary, positive 1D returns were seen about 45% of the time.
• However, this percentage decreases to 33% if we consider data for the last 3 years instead of 5.
• Median of the 9 positive returns = 2.5%, and median of the 11 negative returns = -2.2%

Additional data for observed 5-Day (5D), and 21-Day (21D) returns post earnings are summarized along with the statistics in the table below.

Correlation Between 1D, 5D, and 21D Historical Returns

A relatively less risky strategy (though not useful if the correlation is low) is to understand the correlation between short-term and medium-term returns post earnings, find a pair that has the highest correlation, and execute the appropriate trade. For example, if 1D and 5D show the highest correlation, a trader can position themselves “long” for the next 5 days if 1D post-earnings return is positive. Here is some correlation data based on 5-year and 3-year (more recent) history. Note that the correlation 1D_5D refers to the correlation between 1D post-earnings returns and subsequent 5D returns.

Is There Any Correlation With Peer Earnings?

Sometimes, peer performance can have influence on post-earnings stock reaction. In fact, the pricing-in might begin before the earnings are announced. Here is some historical data on the past post-earnings performance of Prudential Financial stock compared with the stock performance of peers that reported earnings just before Prudential Financial. For fair comparison, peer stock returns also represent post-earnings one-day (1D) returns.

Learn more about Trefis RV strategy that has outperformed its all-cap stocks benchmark (combination of all 3, the S&P 500, S&P mid-cap, and Russell 2000), to produce strong returns for investors. Separately, if you want upside with a smoother ride than an individual stock like Prudential Financial, consider the High Quality portfolio, which has outperformed the S&P, and clocked >91% returns since inception.

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