Is Principal Financial Group, Inc. overvalued or undervalued?

As of 6 August 2025, the valuation grade for Principal Financial Group, Inc. has moved from very expensive to expensive. The company appears to be overvalued based on its current metrics. The P/E ratio stands at 31, significantly higher than the peer average of 30.84, while the Price to Book Value is 3.04, indicating a premium over its book value. Additionally, the EV to EBITDA ratio is extremely high at 402.15, suggesting that investors are paying a steep price relative to earnings before interest, taxes, depreciation, and amortization.
In comparison to its peers, Raymond James Financial, Inc. is valued fairly with a P/E of 18.05, while T. Rowe Price Group, Inc. is very attractive with a P/E of 12.03. This indicates that Principal Financial Group, Inc. is trading at a premium compared to these more favorably valued companies. Over the past year, Principal Financial Group, Inc. has returned -2.33%, underperforming the S&P 500's return of 17.14%, which further reinforces the notion that the stock may be overvalued in the current market environment.