Analysts at RBC Capital provided their views on Principal Financial Group, Inc. (NASDAQ:PFG) following the release of the company’s 2022 outlook.

The company expects 6-8% EPS growth, implying EPS of $7.03-$7.17. The guide includes a 4-5% impact from stranded costs partly offset by the previously announced $2.5-$3 billion capital return plan for the year. Excluding the impact implied core growth would be 10-13%.

While much of the company’s guidance was consistent with previous commentary (particularly EPS growth and capital return), the analysts thought on balance the business unit guidance was a bit better than they had expected and drags from the previously announced reinsurance transaction were slightly smaller than they projected.

Despite some likely noise in the first half of the year, the company has clearly begun to move from being in transition mode to the execution mode of its strategic plan. The analysts view this as being well reflected in the current valuation. They maintain their Sector Perform rating while lowering their price target to $79 from $82.