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Here's Why Hold Strategy Is Apt for Brighthouse Financial (BHF)
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Brighthouse Financial, Inc. (BHF - Free Report) is well-poised for growth, driven by higher annuity sales, underwriting margin, alternative investment income and prudent capital deployment.
Growth Projections
The Zacks Consensus Estimate for Brighthouse’s 2023 earnings is pegged at $14.03, indicating a 28.3% increase from the year-ago reported figure on 0.5% higher revenues of $8.29 billion.
The consensus estimate for 2024 earnings is pegged at $16.65, indicating an 18.6% increase from the year-ago reported figure on 2.1% higher revenues of $8.47 billion.
Zacks Rank & Price Performance
Brighthouse currently carries a Zacks Rank #3 (Hold). In the past year, the stock has lost 17.9% compared with the industry’s decline of 4.3%.
Image Source: Zacks Investment Research
Business Tailwinds
Brighthouse remains well-poised for growth with solid performances by the Annuities, Life and Run-off segments.
Growth in Annuity sales is likely to be driven by record sales of Shield Level annuities and variable annuities with FlexChoice Access, while higher Life sales should continue to gain from sales of SmartCare, both exceeding the insurer’s expectations. In the first quarter, record annuity sales reflect the strength and complementary nature of the product suite. BHF expects annuity sales for 2023 to be $4.8 billion.
Brighthouse remained focused on enhancing the product portfolio with the launch of Shield Level Pay Plus, which is an addition to the suite of Shield Annuities. This product is designed to meet the requirements of retirement planning. Another addition to the Shield Level Annuities product suite was the Shield Options with Step Rate Edge. BHF remains focused on offering a portfolio of products that help meet the evolving needs of clients.
The Run-off segment is likely to gain on the back of higher net investment income and a higher underwriting margin.
Riding on higher alternative investment income, a well-diversified and high-quality portfolio as well as a conservative investment strategy, Brighthouse’s adjusted net investment income is expected to improve. BHF expects an annual alternative investment yield between 9% and 11% over the long term.
In the first quarter of 2023, Brighthouse delivered strong results with an estimated combined risk-based capital (RBC) ratio between 460% and 480%, which is above the targeted range of 400% to 450% in normal markets. As of the end of the first quarter, the estimated combined RBC ratio was between 460% and 480%. The ratio continued to gain from normalized statutory earnings of approximately $200 million, which was driven by the previously mentioned favorable variable annuity results.
A solid statutory balance sheet and sufficient cash continue to support the repurchase strategy. As of Mar 31, 2023, Brighthouse Financial had $231 million remaining under its share repurchase program.
The Zacks Consensus Estimate for Reinsurance Group’s 2023 and 2024 earnings per share is pegged at $17.74 and $17.99, indicating a year-over-year increase of 22.9% and 1.4%, respectively.
Reinsurance Group has a solid track record of beating earnings estimates in three of the last four quarters and missing in one, the average being 56.92%. In the past year, RGA has gained 11.5%.
Kinsale Capital has a solid track record of beating earnings estimates in each of the last trailing four quarters, the average being 14.77%. In the past year, KNSL has gained 34.1%.
The Zacks Consensus Estimate for KNSL’s 2023 and 2024 earnings per share is pegged at $10.37 and $12.41, indicating a year-over-year increase of 32.9% and 19.6%, respectively.
RLI Corp.’s earnings surpassed estimates in each of the last trailing four quarters, the average earnings surprise being 43.50%. In the past year, RLI Corp. has gained 2.4%.
The Zacks Consensus Estimate for RLI’s 2023 and 2024 earnings has moved 2.9% and 0.2% north, respectively, in the past 30 days.
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Here's Why Hold Strategy Is Apt for Brighthouse Financial (BHF)
Brighthouse Financial, Inc. (BHF - Free Report) is well-poised for growth, driven by higher annuity sales, underwriting margin, alternative investment income and prudent capital deployment.
Growth Projections
The Zacks Consensus Estimate for Brighthouse’s 2023 earnings is pegged at $14.03, indicating a 28.3% increase from the year-ago reported figure on 0.5% higher revenues of $8.29 billion.
The consensus estimate for 2024 earnings is pegged at $16.65, indicating an 18.6% increase from the year-ago reported figure on 2.1% higher revenues of $8.47 billion.
Zacks Rank & Price Performance
Brighthouse currently carries a Zacks Rank #3 (Hold). In the past year, the stock has lost 17.9% compared with the industry’s decline of 4.3%.
Image Source: Zacks Investment Research
Business Tailwinds
Brighthouse remains well-poised for growth with solid performances by the Annuities, Life and Run-off segments.
Growth in Annuity sales is likely to be driven by record sales of Shield Level annuities and variable annuities with FlexChoice Access, while higher Life sales should continue to gain from sales of SmartCare, both exceeding the insurer’s expectations. In the first quarter, record annuity sales reflect the strength and complementary nature of the product suite. BHF expects annuity sales for 2023 to be $4.8 billion.
Brighthouse remained focused on enhancing the product portfolio with the launch of Shield Level Pay Plus, which is an addition to the suite of Shield Annuities. This product is designed to meet the requirements of retirement planning. Another addition to the Shield Level Annuities product suite was the Shield Options with Step Rate Edge. BHF remains focused on offering a portfolio of products that help meet the evolving needs of clients.
The Run-off segment is likely to gain on the back of higher net investment income and a higher underwriting margin.
Riding on higher alternative investment income, a well-diversified and high-quality portfolio as well as a conservative investment strategy, Brighthouse’s adjusted net investment income is expected to improve. BHF expects an annual alternative investment yield between 9% and 11% over the long term.
In the first quarter of 2023, Brighthouse delivered strong results with an estimated combined risk-based capital (RBC) ratio between 460% and 480%, which is above the targeted range of 400% to 450% in normal markets. As of the end of the first quarter, the estimated combined RBC ratio was between 460% and 480%. The ratio continued to gain from normalized statutory earnings of approximately $200 million, which was driven by the previously mentioned favorable variable annuity results.
A solid statutory balance sheet and sufficient cash continue to support the repurchase strategy. As of Mar 31, 2023, Brighthouse Financial had $231 million remaining under its share repurchase program.
Stocks to Consider
Some better-ranked stocks from the insurance industry are Reinsurance Group of America, Incorporated (RGA - Free Report) , Kinsale Capital Group, Inc. (KNSL - Free Report) and RLI Corp. (RLI - Free Report) , each sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Reinsurance Group’s 2023 and 2024 earnings per share is pegged at $17.74 and $17.99, indicating a year-over-year increase of 22.9% and 1.4%, respectively.
Reinsurance Group has a solid track record of beating earnings estimates in three of the last four quarters and missing in one, the average being 56.92%. In the past year, RGA has gained 11.5%.
Kinsale Capital has a solid track record of beating earnings estimates in each of the last trailing four quarters, the average being 14.77%. In the past year, KNSL has gained 34.1%.
The Zacks Consensus Estimate for KNSL’s 2023 and 2024 earnings per share is pegged at $10.37 and $12.41, indicating a year-over-year increase of 32.9% and 19.6%, respectively.
RLI Corp.’s earnings surpassed estimates in each of the last trailing four quarters, the average earnings surprise being 43.50%. In the past year, RLI Corp. has gained 2.4%.
The Zacks Consensus Estimate for RLI’s 2023 and 2024 earnings has moved 2.9% and 0.2% north, respectively, in the past 30 days.