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BHF Outperforms Industry, Trades at a Discount: How to Play the Stock
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Key Takeaways
BHF poised to benefit from a growing individual insurance market and an expanding distribution network.
BHF strengthened product portfolio with Shield Level Pay Plus and SecureKey, driving insurance sales.
BHF maintains a well-diversified investment portfolio, that support stable earnings and capital strength.
Shares of Brighthouse Financial, Inc. (BHF - Free Report) have gained 37.7% in the past year, outperforming its industry, the Finance sector and the Zacks S&P 500 composite’s growth of 17.3%, 19.6% and 10.8%, respectively.
The insurer has a market capitalization of $3.31 billion. The average volume of shares traded in the last three months was 0.8 million.
BHF vs Industry, Sector & S&P 500 in 1 Year
Image Source: Zacks Investment Research
Attractive Valuation of BHF
Brighthouse Financial’s shares are trading at a discount compared to the industry. Its forward price-to-book value of 0.63X is lower than the industry average of 1.97X, the Finance sector’s 4.16X and the Zacks S&P 500 Composite’s 8.09X.
BHF is also cheaper compared with Reinsurance Group of America, Incorporated (RGA - Free Report) , Sun Life Financial Inc. (SLF - Free Report) and Manulife Financial Corp (MFC - Free Report) .
Image Source: Zacks Investment Research
BHF Trading Above 50-Day and 200-Day Moving Averages
Shares of Brighthouse Financial closed at $57.67 on Tuesday and are trading above the 50-day and 200-day simple moving averages (SMA) of $56.18 and $52.08, indicating solid upward momentum. SMA is a widely used technical analysis tool to predict future price trends by analyzing historical price data.
BHF Price Movement vs. 50- Day, 200-Day Moving Average
Image Source: Zacks Investment Research
BHF’s Encouraging Growth Projection
The Zacks Consensus Estimate for Brighthouse Financial’s 2025 revenues is pegged at $8.84 billion, implying a year-over-year improvement of 1.4%. The consensus estimate for 2026 earnings per share and revenues indicates an increase of 14.5% and 1.8%, respectively, from the corresponding 2025 estimates.
Earnings have grown 16.5% in the past five years, better than the industry average of 7.8%. BHF beat earnings estimates in two of the past four quarters and missed in the other two, with an average surprise of 9.3%.
Average Target Price for BHF Suggests Downside
Based on short-term price targets offered by 10 analysts, the Zacks average price target is $58.50 per share. The average suggests a potential 0.66% downside from the last closing price.
Image Source: Zacks Investment Research
Bearish Analyst Sentiment on BHF
Three of the six analysts covering the stock have lowered estimates for 2025, while one analyst has lowered the same for 2026 over the past 30 days.
The Zacks Consensus Estimate for 2025 earnings has moved down 2.7% in the past 30 days, while the same for 2026 has moved down 0.8% in the same time frame.
Image Source: Zacks Investment Research
Brighthouse Financial’s Return on Capital
BHF’s trailing 12-month return on equity is 25.6%, ahead of the industry average of 15.37%. Return on equity, a profitability measure, reflects how effectively a company is utilizing its shareholders.
Factors Acting in Favor of BHF
Brighthouse Financial is one of the largest providers of life insurance products in the United States. Given the expansive and compelling suite of life products, the company should benefit from the growing individual insurance market. The insurer remains focused on ramping up sales of life insurance products and expanding its distribution network, aiming to become a premier player in the industry.
BHF remained focused on enhancing its product portfolio with the launch of Shield Level Pay Plus, which is an addition to the suite of Shield Annuities. Strong Shield Level Annuity sales and higher fixed indexed annuity sales from the company's recently launched SecureKey product boosted the Annuity sales. Fixed deferred annuities also contributed to the growth. Improved underwriting margin and net investment income should contribute to higher Life insurance sales.
Brighthouse Financial should benefit from the growing individual insurance market. BHF remains focused on ramping up new sales of life insurance products, strengthening annuity products and expanding its distribution network, aiming to become a premier player in the industry. Strong Shield Level Annuity sales and higher fixed indexed annuity sales from the recently launched SecureKey product contributed to higher Annuity sales. Higher underwriting margins and net investment income boosted Life insurance sales. Execution of the life insurance strategy, including the addition of new distribution partners and wholesalers, is expected to drive growth.
Net investment income has been exhibiting an improving trend over the past few quarters. Riding on alternative investment income, asset growth and higher interest rates, the insurer expects the metric to improve in the future. Given a well-diversified and high-quality portfolio as well as a conservative investment strategy, we expect the metric to improve in the future.
Brighthouse Financial continued to focus on maintaining the strength of the balance sheet. Given enhanced financial strength and flexibility, the company remains committed to returning capital to shareholders and intends to maintain an opportunistic share repurchase program to create significant value for them.
Conclusion
Higher annuity and life insurance sales, a high-quality portfolio and effective capital deployment position the life insurer well for growth. A robust capital position over the years reflects its financial flexibility. The launch of SecureKey product, Fixed deferred annuities, as well as Shield Level Pay Plus, should boost Brighthouse Financial’s product portfolio.
Higher return on capital, favorable growth estimates, as well as attractive valuations, should continue to benefit Brighthouse Financial over the long term.
Image: Bigstock
BHF Outperforms Industry, Trades at a Discount: How to Play the Stock
Key Takeaways
Shares of Brighthouse Financial, Inc. (BHF - Free Report) have gained 37.7% in the past year, outperforming its industry, the Finance sector and the Zacks S&P 500 composite’s growth of 17.3%, 19.6% and 10.8%, respectively.
The insurer has a market capitalization of $3.31 billion. The average volume of shares traded in the last three months was 0.8 million.
BHF vs Industry, Sector & S&P 500 in 1 Year
Image Source: Zacks Investment Research
Attractive Valuation of BHF
Brighthouse Financial’s shares are trading at a discount compared to the industry. Its forward price-to-book value of 0.63X is lower than the industry average of 1.97X, the Finance sector’s 4.16X and the Zacks S&P 500 Composite’s 8.09X.
BHF is also cheaper compared with Reinsurance Group of America, Incorporated (RGA - Free Report) , Sun Life Financial Inc. (SLF - Free Report) and Manulife Financial Corp (MFC - Free Report) .
Image Source: Zacks Investment Research
BHF Trading Above 50-Day and 200-Day Moving Averages
Shares of Brighthouse Financial closed at $57.67 on Tuesday and are trading above the 50-day and 200-day simple moving averages (SMA) of $56.18 and $52.08, indicating solid upward momentum. SMA is a widely used technical analysis tool to predict future price trends by analyzing historical price data.
BHF Price Movement vs. 50- Day, 200-Day Moving Average
Image Source: Zacks Investment Research
BHF’s Encouraging Growth Projection
The Zacks Consensus Estimate for Brighthouse Financial’s 2025 revenues is pegged at $8.84 billion, implying a year-over-year improvement of 1.4%. The consensus estimate for 2026 earnings per share and revenues indicates an increase of 14.5% and 1.8%, respectively, from the corresponding 2025 estimates.
Earnings have grown 16.5% in the past five years, better than the industry average of 7.8%. BHF beat earnings estimates in two of the past four quarters and missed in the other two, with an average surprise of 9.3%.
Average Target Price for BHF Suggests Downside
Based on short-term price targets offered by 10 analysts, the Zacks average price target is $58.50 per share. The average suggests a potential 0.66% downside from the last closing price.
Image Source: Zacks Investment Research
Bearish Analyst Sentiment on BHF
Three of the six analysts covering the stock have lowered estimates for 2025, while one analyst has lowered the same for 2026 over the past 30 days.
The Zacks Consensus Estimate for 2025 earnings has moved down 2.7% in the past 30 days, while the same for 2026 has moved down 0.8% in the same time frame.
Image Source: Zacks Investment Research
Brighthouse Financial’s Return on Capital
BHF’s trailing 12-month return on equity is 25.6%, ahead of the industry average of 15.37%. Return on equity, a profitability measure, reflects how effectively a company is utilizing its shareholders.
Factors Acting in Favor of BHF
Brighthouse Financial is one of the largest providers of life insurance products in the United States. Given the expansive and compelling suite of life products, the company should benefit from the growing individual insurance market. The insurer remains focused on ramping up sales of life insurance products and expanding its distribution network, aiming to become a premier player in the industry.
BHF remained focused on enhancing its product portfolio with the launch of Shield Level Pay Plus, which is an addition to the suite of Shield Annuities. Strong Shield Level Annuity sales and higher fixed indexed annuity sales from the company's recently launched SecureKey product boosted the Annuity sales. Fixed deferred annuities also contributed to the growth. Improved underwriting margin and net investment income should contribute to higher Life insurance sales.
Brighthouse Financial should benefit from the growing individual insurance market. BHF remains focused on ramping up new sales of life insurance products, strengthening annuity products and expanding its distribution network, aiming to become a premier player in the industry. Strong Shield Level Annuity sales and higher fixed indexed annuity sales from the recently launched SecureKey product contributed to higher Annuity sales. Higher underwriting margins and net investment income boosted Life insurance sales. Execution of the life insurance strategy, including the addition of new distribution partners and wholesalers, is expected to drive growth.
Net investment income has been exhibiting an improving trend over the past few quarters. Riding on alternative investment income, asset growth and higher interest rates, the insurer expects the metric to improve in the future. Given a well-diversified and high-quality portfolio as well as a conservative investment strategy, we expect the metric to improve in the future.
Brighthouse Financial continued to focus on maintaining the strength of the balance sheet. Given enhanced financial strength and flexibility, the company remains committed to returning capital to shareholders and intends to maintain an opportunistic share repurchase program to create significant value for them.
Conclusion
Higher annuity and life insurance sales, a high-quality portfolio and effective capital deployment position the life insurer well for growth. A robust capital position over the years reflects its financial flexibility. The launch of SecureKey product, Fixed deferred annuities, as well as Shield Level Pay Plus, should boost Brighthouse Financial’s product portfolio.
Higher return on capital, favorable growth estimates, as well as attractive valuations, should continue to benefit Brighthouse Financial over the long term.
Given the bearish analysts’ sentiment, it is better to stay cautious about this Zacks Rank #3 (Hold) stock. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.