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MetLife (MET) Up 14.2% Since Last Earnings Report: Can It Continue?
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A month has gone by since the last earnings report for MetLife (MET - Free Report) . Shares have added about 14.2% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is MetLife due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
MetLife’s (MET - Free Report) Q1 Earnings Top Estimates, Revenues Lag
MetLife, Inc.’s first-quarter 2020 operating earnings of $1.58 per share beat the Zacks Consensus Estimate by 8.97% and also improved 6.7% year over year.
Behind the Headlines
Though the company’s operating revenues of $15.5 billion were up 1% year over year, the same missed the Zacks Consensus Estimate by 7%.
Adjusted premiums, fees & other revenues excluding pension risk transfer were up marginally 0.4% year over year to $11.2 billion.
Net investment income (adjusted) of $4.3 billion was up 1% year over year, driven by higher private equity income.
Total adjusted expenses of $13.7 million were up 0.6% year over year.
Adjusted expense ratio of 19.7% was down 80 basis points year over year.
Adjusted book value per share was $52.36, up 15% year over year.
Adjusted return on equity was 12.6%, down 110 basis points year over year.
Quarterly Segment Details
United States
Adjusted earnings in this segment increased 8% year over year to $780 million on higher contribution in Retirement and Income Solutions, and Property and Casualty, partly offset by lower underwriting margins in the
Group Benefits sub-segment.
Adjusted premiums, fees & other revenues were $6.2 billion, up 2% year over year owing to higher premiums in Group Benefits, and Property and Casualty sub-segments, partly offset by lower premiums in Retirement and Income Solution sub-segment.
Asia
Operating earnings of $351 million stayed flat year over year, attributable to volume growth, which in turn, was offset by less favorable underwriting, unfavorable equity markets and soft investment margins. Adjusted premiums, fees & other revenues were $2.1 billion, down 2% on constant-currency basis.
Latin America
Operating earnings of $95 million were down 19% year over year due to lower equity returns, which impacted the Chilean encaje returns. Adjusted premiums, fees & other revenues were $921 million, up 8% on improved sales in Chile, Mexico and Brazil.
Operating earnings from EMEA decreased 6% year over year to $78 million, primarily due to lower equity markets and unfavorable underwriting. Adjusted premiums, fees & other revenues of $697 million were up 8% year over year on constant-currency basis on the back of higher sales.
MetLife Holdings
Adjusted operating earnings from MetLife Holdings came in at $277 million, down 13% year over year.
Operating premiums, fees & other revenues were $1.2 billion, down 3% year over year.
Financial Update
As of Mar 31, 2020, shareholders’ equity was $65.9 billion, up 19.4% year over year.
Long-term debt as of the first-quarter end was $14.5 billion, up 7.4% sequentially.
Cash and cash equivalents of $24.1 billion as of Mar 31, 2020, were up 45.2% sequentially.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended downward during the past month. The consensus estimate has shifted -32.18% due to these changes.
VGM Scores
At this time, MetLife has a nice Growth Score of B, a grade with the same score on the momentum front. Charting a somewhat similar path, the stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise MetLife has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.
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MetLife (MET) Up 14.2% Since Last Earnings Report: Can It Continue?
A month has gone by since the last earnings report for MetLife (MET - Free Report) . Shares have added about 14.2% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is MetLife due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
MetLife’s (MET - Free Report) Q1 Earnings Top Estimates, Revenues Lag
MetLife, Inc.’s first-quarter 2020 operating earnings of $1.58 per share beat the Zacks Consensus Estimate by 8.97% and also improved 6.7% year over year.
Behind the Headlines
Though the company’s operating revenues of $15.5 billion were up 1% year over year, the same missed the Zacks Consensus Estimate by 7%.
Adjusted premiums, fees & other revenues excluding pension risk transfer were up marginally 0.4% year over year to $11.2 billion.
Net investment income (adjusted) of $4.3 billion was up 1% year over year, driven by higher private equity income.
Total adjusted expenses of $13.7 million were up 0.6% year over year.
Adjusted expense ratio of 19.7% was down 80 basis points year over year.
Adjusted book value per share was $52.36, up 15% year over year.
Adjusted return on equity was 12.6%, down 110 basis points year over year.
Quarterly Segment Details
United States
Adjusted earnings in this segment increased 8% year over year to $780 million on higher contribution in Retirement and Income Solutions, and Property and Casualty, partly offset by lower underwriting margins in the
Group Benefits sub-segment.
Adjusted premiums, fees & other revenues were $6.2 billion, up 2% year over year owing to higher premiums in Group Benefits, and Property and Casualty sub-segments, partly offset by lower premiums in Retirement and Income Solution sub-segment.
Asia
Operating earnings of $351 million stayed flat year over year, attributable to volume growth, which in turn, was offset by less favorable underwriting, unfavorable equity markets and soft investment margins.
Adjusted premiums, fees & other revenues were $2.1 billion, down 2% on constant-currency basis.
Latin America
Operating earnings of $95 million were down 19% year over year due to lower equity returns, which impacted the Chilean encaje returns. Adjusted premiums, fees & other revenues were $921 million, up 8% on improved sales in Chile, Mexico and Brazil.
Operating earnings from EMEA decreased 6% year over year to $78 million, primarily due to lower equity markets and unfavorable underwriting.
Adjusted premiums, fees & other revenues of $697 million were up 8% year over year on constant-currency basis on the back of higher sales.
MetLife Holdings
Adjusted operating earnings from MetLife Holdings came in at $277 million, down 13% year over year.
Operating premiums, fees & other revenues were $1.2 billion, down 3% year over year.
Financial Update
As of Mar 31, 2020, shareholders’ equity was $65.9 billion, up 19.4% year over year.
Long-term debt as of the first-quarter end was $14.5 billion, up 7.4% sequentially.
Cash and cash equivalents of $24.1 billion as of Mar 31, 2020, were up 45.2% sequentially.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended downward during the past month. The consensus estimate has shifted -32.18% due to these changes.
VGM Scores
At this time, MetLife has a nice Growth Score of B, a grade with the same score on the momentum front. Charting a somewhat similar path, the stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise MetLife has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.