MetLife Shares Hit New Document Excessive After Sturdy Q1 Earnings; Goal Worth $72 in Greatest Case

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MetLife, one of many largest life insurers on the earth, reported better-than-expected earnings within the first quarter of 2021 and mentioned the worst influence of the COVID-19 pandemic was behind, sending shares to a file excessive on Wednesday.

The New York-based insurer reported web earnings of $290 million, or $0.33 per share, in comparison with web earnings of $4.4 billion, or $4.75 per share, within the first quarter of 2020. Adjusted earnings rose to $2.0 billion, or $2.20 per share, up from adjusted earnings of $1.4 billion, or $1.58 per share, seen in the identical interval a yr in the past. That beat the Wall Avenue consensus estimates of $1.48 per share.

“Within the quarter, we had been very happy to return roughly $1.4 billion to shareholders via share repurchases and customary inventory dividends. We imagine the worst influence of the pandemic on our enterprise efficiency is behind us, and we’re well-positioned to create extra worth for our stakeholders sooner or later,” mentioned MetLife President and CEO Michel Khalaf.

The chief of life insurance coverage firm mentioned its web funding earnings rose 74% to $5.3 billion, largely pushed by will increase within the estimated honest worth of sure securities that don’t qualify as separate accounts beneath GAAP and better variable funding earnings primarily resulting from greater non-public fairness returns.

Following the upbeat outcomes, MetLife shares hit an all-time of $65.905 on Wednesday. The inventory rose over 39% to date this yr.

Analyst Feedback

“This quarter’s outcomes clearly obtained an outsized profit from robust various outcomes, however what impresses us extra is the steadiness and development in underlying earnings, which ought to assist in our view to drive additional upside within the inventory,” famous Nigel Dally, fairness analyst at Morgan Stanley.

“Working EPS was $2.20, significantly above each our estimate and the consensus of $1.53. Favorable marks on various investments offered extra of a lift than anticipated, contributing over $1 billion to pre-tax earnings above a traditional stage. Conversely, pandemic-related claims weighed on some divisions, most notably its home group insurance coverage operations. Excluding these things, we view the core earnings run-rate potential of the corporate as being largely in-line with prior expectations.”

MetLife Inventory Worth Forecast

9 analysts who provided inventory scores for MetLife within the final three months forecast the common value in 12 months of $66.11 with a excessive forecast of $72.00 and a low forecast of $54.00.

The typical value goal represents a 1.07% improve from the final value of $65.41. Of these 9 analysts, eight rated “Purchase”, one rated “Maintain” whereas none rated “Promote”, in line with Tipranks.

Morgan Stanley raised the bottom goal value to $72 from $70 with a excessive of $83 beneath a bull situation and $48 beneath the worst-case situation. The agency gave an “Chubby” score on the life insurer’s inventory.

“Following its retail separation, the corporate is dedicated to worthwhile development whereas additionally simplify its operations to scale back earnings volatility. The corporate additionally de-risked its funding portfolio considerably. Given these strikes, the funding thesis for MetLife now revolves round capital administration and free money circulation era, development in worldwide operations, and expense discount initiatives,” Morgan Stanley’s Dally added.

“We imagine MetLife has the power to proceed its stable execution in its numerous companies. Extra importantly, the stable outcomes over the previous a number of quarters weren’t pushed by a single division, with all segments contributing to earnings development to a sure extent.”

A number of different analysts have additionally up to date their inventory outlook. JP Morgan raised the inventory value forecast to $66 from $64. UBS initiated with a purchase score and a $72 goal value. KBW upped the worth goal to $68 from $64. Piper Sandler lifted the worth goal to $68 from $58. Evercore ISI elevated the worth goal to $65 from $52. RBC raised the goal value to $66 from $57.

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