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How Should You Play MetLife (MET) Ahead of Q1 Earnings?
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MetLife, Inc. (MET - Free Report) is slated to release first-quarter 2024 results on May 1, after market close. Higher premiums, variable investment income and increased volumes across Group Benefits and Latin America units are likely to have worked well for the company, partly undone by rising costs.
Factors to Note
In the first quarter, revenues of MetLife are expected to have benefited on the back of higher premiums and net investment income. The Zacks Consensus Estimate for premiums is pegged at $10.9 billion, which indicates an improvement of 13.5% from the year-ago quarter’s reported figure.
Net investment income is likely to have been aided by improved variable investment income as a result of higher returns from corporate and mortgage loan funds. The consensus mark for net investment income is $4.9 billion, suggesting a 6.1% growth from the year-ago quarter’s figure.
Most of the segments, barring EMEA, are likely to have contributed favorably to MetLife’s first-quarter’s performance. The EMEA unit is likely to have suffered a roadblock due to less favorable expenses and underwriting margins.
Nevertheless, solid contributions by the Group Benefits, Retirement Plan Services (RIS), Asia and Latin America businesses are expected to have driven the overall results of MET. Strong life underwriting margins, increased volumes and a lower Group Life mortality ratio are likely to have driven the performance of the Group Benefits business in the first quarter. The Zacks Consensus Estimate for the segment’s adjusted revenues is pegged at $6.5 billion, which implies a 1.7% rise from the year-ago quarter’s reported figure.
RIS’ results are likely to have been aided by improved recurring interest, variable investment income and underwriting margins in the first quarter. The consensus mark for the unit’s adjusted revenues is $3.7 billion, suggesting a 50.5% surge from the year-ago quarter’s number.
Meanwhile, an increase in investment margins and lower taxes are expected to have driven the Asia segment’s performance. Higher general account assets under management are also likely to have contributed to the upside. The Zacks Consensus Estimate for the unit’s adjusted revenues is pegged at $2.9 billion, which indicates a 7% rise from the year-ago quarter’s figure.
The Latin America segment’s quarterly results are likely to have gained on the back of higher volumes, partly offset by less favorable underwriting margins. The consensus mark for the unit’s adjusted revenues is $1.9 billion, suggesting 11.3% growth from the year-ago quarter’s reported number.
While all these tailwinds can position the stock well for close evaluation, we remain concerned about the escalating trend observed in its overall costs, particularly in the light of several expense management initiatives being undertaken. A higher expense level can affect the profit growth potential of MET and make an earnings beat uncertain.
Q1 Estimates
The Zacks Consensus Estimate for MET’s first-quarter earnings per share is pegged at $1.83, which indicates an improvement of 20.4% from the year-ago quarter’s reported figure.
The consensus mark for revenues is $17.7 billion, suggesting 9.7% growth from the year-ago quarter's actual.
Earnings Surprise History
MetLife’s earnings beat estimates in one of the trailing four quarters and missed the mark thrice, the average negative surprise being 3.76%. This is depicted in the chart below:
Our proven model does not conclusively predict an earnings beat for MetLife this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. However, that’s not the case here, as you see below.
MetLife has an Earnings ESP of -1.08% and a Zacks Rank of 3.
You can uncover the best stocks before they’re reported with our Earnings ESP Filter.
Stocks to Consider
Here are some companies from the Finance space, which according to our model, have the right combination of elements to beat on earnings this time around:
The Zacks Consensus Estimate for VCTR’s first-quarter 2024 earnings is pegged at $1.21 per share, indicating an improvement of 12% from the year-ago quarter’s reported number.
Victory Capital’s earnings beat estimates in two of the trailing four quarters and matched the mark twice, the average surprise being 1.10%.
Primerica, Inc. (PRI - Free Report) has an Earnings ESP of +0.46% and a Zacks Rank of 2 at present. The Zacks Consensus Estimate for PRI’s first-quarter 2024 earnings is pegged at $4.11 per share, which implies a 17.8% rise from the year-ago quarter’s reported figure.
Primerica’s earnings beat estimates in three of the trailing four quarters and missed the mark once, the average surprise being 3.10%.
Houlihan Lokey, Inc. (HLI - Free Report) currently has an Earnings ESP of +2.37% and a Zacks Rank of 3. The Zacks Consensus Estimate for HLI’s first-quarter 2024 earnings is pegged at $1.20 per share, which indicates an improvement of 8.1% from the year-ago quarter’s reported figure.
Houlihan Lokey’s earnings beat estimates in three of the trailing four quarters and missed the mark once, the average surprise being 8.33%.
Image: Bigstock
How Should You Play MetLife (MET) Ahead of Q1 Earnings?
MetLife, Inc. (MET - Free Report) is slated to release first-quarter 2024 results on May 1, after market close. Higher premiums, variable investment income and increased volumes across Group Benefits and Latin America units are likely to have worked well for the company, partly undone by rising costs.
Factors to Note
In the first quarter, revenues of MetLife are expected to have benefited on the back of higher premiums and net investment income. The Zacks Consensus Estimate for premiums is pegged at $10.9 billion, which indicates an improvement of 13.5% from the year-ago quarter’s reported figure.
Net investment income is likely to have been aided by improved variable investment income as a result of higher returns from corporate and mortgage loan funds. The consensus mark for net investment income is $4.9 billion, suggesting a 6.1% growth from the year-ago quarter’s figure.
Most of the segments, barring EMEA, are likely to have contributed favorably to MetLife’s first-quarter’s performance. The EMEA unit is likely to have suffered a roadblock due to less favorable expenses and underwriting margins.
Nevertheless, solid contributions by the Group Benefits, Retirement Plan Services (RIS), Asia and Latin America businesses are expected to have driven the overall results of MET. Strong life underwriting margins, increased volumes and a lower Group Life mortality ratio are likely to have driven the performance of the Group Benefits business in the first quarter. The Zacks Consensus Estimate for the segment’s adjusted revenues is pegged at $6.5 billion, which implies a 1.7% rise from the year-ago quarter’s reported figure.
RIS’ results are likely to have been aided by improved recurring interest, variable investment income and underwriting margins in the first quarter. The consensus mark for the unit’s adjusted revenues is $3.7 billion, suggesting a 50.5% surge from the year-ago quarter’s number.
Meanwhile, an increase in investment margins and lower taxes are expected to have driven the Asia segment’s performance. Higher general account assets under management are also likely to have contributed to the upside. The Zacks Consensus Estimate for the unit’s adjusted revenues is pegged at $2.9 billion, which indicates a 7% rise from the year-ago quarter’s figure.
The Latin America segment’s quarterly results are likely to have gained on the back of higher volumes, partly offset by less favorable underwriting margins. The consensus mark for the unit’s adjusted revenues is $1.9 billion, suggesting 11.3% growth from the year-ago quarter’s reported number.
While all these tailwinds can position the stock well for close evaluation, we remain concerned about the escalating trend observed in its overall costs, particularly in the light of several expense management initiatives being undertaken. A higher expense level can affect the profit growth potential of MET and make an earnings beat uncertain.
Q1 Estimates
The Zacks Consensus Estimate for MET’s first-quarter earnings per share is pegged at $1.83, which indicates an improvement of 20.4% from the year-ago quarter’s reported figure.
The consensus mark for revenues is $17.7 billion, suggesting 9.7% growth from the year-ago quarter's actual.
Earnings Surprise History
MetLife’s earnings beat estimates in one of the trailing four quarters and missed the mark thrice, the average negative surprise being 3.76%. This is depicted in the chart below:
MetLife, Inc. Price and EPS Surprise
MetLife, Inc. price-eps-surprise | MetLife, Inc. Quote
Our proven model does not conclusively predict an earnings beat for MetLife this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. However, that’s not the case here, as you see below.
MetLife has an Earnings ESP of -1.08% and a Zacks Rank of 3.
You can uncover the best stocks before they’re reported with our Earnings ESP Filter.
Stocks to Consider
Here are some companies from the Finance space, which according to our model, have the right combination of elements to beat on earnings this time around:
Victory Capital Holdings, Inc. (VCTR - Free Report) currently has an Earnings ESP of +1.32% and a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for VCTR’s first-quarter 2024 earnings is pegged at $1.21 per share, indicating an improvement of 12% from the year-ago quarter’s reported number.
Victory Capital’s earnings beat estimates in two of the trailing four quarters and matched the mark twice, the average surprise being 1.10%.
Primerica, Inc. (PRI - Free Report) has an Earnings ESP of +0.46% and a Zacks Rank of 2 at present. The Zacks Consensus Estimate for PRI’s first-quarter 2024 earnings is pegged at $4.11 per share, which implies a 17.8% rise from the year-ago quarter’s reported figure.
Primerica’s earnings beat estimates in three of the trailing four quarters and missed the mark once, the average surprise being 3.10%.
Houlihan Lokey, Inc. (HLI - Free Report) currently has an Earnings ESP of +2.37% and a Zacks Rank of 3. The Zacks Consensus Estimate for HLI’s first-quarter 2024 earnings is pegged at $1.20 per share, which indicates an improvement of 8.1% from the year-ago quarter’s reported figure.
Houlihan Lokey’s earnings beat estimates in three of the trailing four quarters and missed the mark once, the average surprise being 8.33%.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.