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MetLife Stock Before Q3 Earnings: Buy Now or Wait for Results?
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MetLife, Inc. (MET - Free Report) is set to report third-quarter 2024 results on Oct. 30, 2024, after the closing bell. The Zacks Consensus Estimate for the to-be-reported quarter’s earnings is currently pegged at $2.16 per share on revenues of $18.5 billion.
Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.
The third-quarter earnings estimate has witnessed downward revisions over the past 60 days. However, the bottom-line projection indicates a year-over-year increase of 9.6%. The Zacks Consensus Estimate for quarterly revenues suggests year-over-year growth of 1.3%.
Image Source: Zacks Investment Research
For the current year, the Zacks Consensus Estimate for MetLife’s revenues is pegged at $73.3 billion, implying a rise of 2.3% year over year. Also, the consensus mark for current year EPS is pegged at $8.58, implying a jump of around 17.1% on a year-over-year basis.
MetLife beat the consensus estimate for earnings in one of the last four quarters, met once and missed on the other occasions, with the average surprise being 1.3%.
Nonetheless, our proven model predicts a likely earnings beat for the company 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. That’s precisely the case here.
MetLife has an Earnings ESP of +0.98% and a Zacks Rank #3.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Rising premiums from most businesses and investment income are expected to have buoyed MetLife’s third-quarter results. Improving operations in the international markets, especially in Asia and Latin America, is a major positive.
The Zacks Consensus Estimate for total premiums for the quarter under review suggests an increase of 1.4% from the prior-year quarter. Also, the consensus mark for net investment income indicates a 6.3% year-over-year increase from the year-ago period on the back of higher rates and improved variable investment income.
Improving profits from the Asia and Latin American operations are expected to have positioned the company for significant growth from the year-ago period and a potential earnings beat. Favorable underwriting and improved variable investment income are likely to have aided the Asia segment, while the Latin America business is expected to have gained from higher volumes.
However, rising costs and expenses are likely to have partially offset the profit growth levels in the to-be-reported quarter. Also, the consensus estimate for Group Benefits’ adjusted earnings predicts a 10.9% decrease from the prior-year quarter’s reading.
The company is expected to have witnessed 10.5% lower profits from the U.S. Business, while adjusted earnings from EMEA regions are likely to have witnessed a 24.7% year-over-year decline.
MET’s Price Performance & Valuation
MetLife's stock has gained 25.7% year to date, outperforming the industry’s growth of 18.7%. Some of its peers, like The Hartford Financial Services Group, Inc. (HIG - Free Report) and Prudential Financial, Inc. (PRU - Free Report) , have gained 41.1% and 21.2%, respectively, during this time. MET stock has outpaced the S&P 500 Index, which has increased 21.9% during the same period.
MET’s YTD Price Performance
Image Source: Zacks Investment Research
Now, let’s look at the value MetLife offers investors at current levels.
Despite the company’s share price outperforming the industry, its valuation appears cheaper when measured against industry averages. Currently, MET is trading at 8.65X forward 12-month earnings, below the industry’s average of 9.28X.
Image Source: Zacks Investment Research
What Should Investors Do?
MetLife’s strategic focus on diversifying its product portfolio and revenue streams is positioning it for sustained, long-term growth. Through well-chosen acquisitions, it is expanding in its core markets and entering new ones while divesting less profitable assets to optimize its portfolio.
The company’s cost-saving initiatives are expected to enhance margins, and its strong solvency position offers resilience in challenging market conditions. Supported by a solid balance sheet, MetLife is well-equipped to continue enhancing shareholder value. As such, current investors can hold onto their shares and benefit from its growth initiatives.
While MET’s long-term growth potential looks promising due to its strategic moves, it may not be the most favorable time for new investors to buy in. Domestic profits are expected to decline in the near term, and the company’s reliance on investment income could leave it exposed to market volatility.
Additionally, its return on invested capital stands at 1.9%, lagging behind the industry average of 2.5%, indicating potential inefficiency in capital use. Given that the stock is trading near its 52-week high, the potential for short-term gains appears limited. For these reasons, new investors might consider waiting for a more attractive entry point and monitor upcoming earnings results for further insights.
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MetLife Stock Before Q3 Earnings: Buy Now or Wait for Results?
MetLife, Inc. (MET - Free Report) is set to report third-quarter 2024 results on Oct. 30, 2024, after the closing bell. The Zacks Consensus Estimate for the to-be-reported quarter’s earnings is currently pegged at $2.16 per share on revenues of $18.5 billion.
Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.
The third-quarter earnings estimate has witnessed downward revisions over the past 60 days. However, the bottom-line projection indicates a year-over-year increase of 9.6%. The Zacks Consensus Estimate for quarterly revenues suggests year-over-year growth of 1.3%.
For the current year, the Zacks Consensus Estimate for MetLife’s revenues is pegged at $73.3 billion, implying a rise of 2.3% year over year. Also, the consensus mark for current year EPS is pegged at $8.58, implying a jump of around 17.1% on a year-over-year basis.
MetLife beat the consensus estimate for earnings in one of the last four quarters, met once and missed on the other occasions, with the average surprise being 1.3%.
MetLife, Inc. Price and EPS Surprise
MetLife, Inc. price-eps-surprise | MetLife, Inc. Quote
Q3 Earnings Whispers for MET
Nonetheless, our proven model predicts a likely earnings beat for the company 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. That’s precisely the case here.
MetLife has an Earnings ESP of +0.98% and a Zacks Rank #3.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
You can see the complete list of today’s Zacks #1 Rank stocks here.
What’s Shaping MET’s Q3 Results?
Rising premiums from most businesses and investment income are expected to have buoyed MetLife’s third-quarter results. Improving operations in the international markets, especially in Asia and Latin America, is a major positive.
The Zacks Consensus Estimate for total premiums for the quarter under review suggests an increase of 1.4% from the prior-year quarter. Also, the consensus mark for net investment income indicates a 6.3% year-over-year increase from the year-ago period on the back of higher rates and improved variable investment income.
Improving profits from the Asia and Latin American operations are expected to have positioned the company for significant growth from the year-ago period and a potential earnings beat. Favorable underwriting and improved variable investment income are likely to have aided the Asia segment, while the Latin America business is expected to have gained from higher volumes.
However, rising costs and expenses are likely to have partially offset the profit growth levels in the to-be-reported quarter. Also, the consensus estimate for Group Benefits’ adjusted earnings predicts a 10.9% decrease from the prior-year quarter’s reading.
The company is expected to have witnessed 10.5% lower profits from the U.S. Business, while adjusted earnings from EMEA regions are likely to have witnessed a 24.7% year-over-year decline.
MET’s Price Performance & Valuation
MetLife's stock has gained 25.7% year to date, outperforming the industry’s growth of 18.7%. Some of its peers, like The Hartford Financial Services Group, Inc. (HIG - Free Report) and Prudential Financial, Inc. (PRU - Free Report) , have gained 41.1% and 21.2%, respectively, during this time. MET stock has outpaced the S&P 500 Index, which has increased 21.9% during the same period.
MET’s YTD Price Performance
Now, let’s look at the value MetLife offers investors at current levels.
Despite the company’s share price outperforming the industry, its valuation appears cheaper when measured against industry averages. Currently, MET is trading at 8.65X forward 12-month earnings, below the industry’s average of 9.28X.
What Should Investors Do?
MetLife’s strategic focus on diversifying its product portfolio and revenue streams is positioning it for sustained, long-term growth. Through well-chosen acquisitions, it is expanding in its core markets and entering new ones while divesting less profitable assets to optimize its portfolio.
The company’s cost-saving initiatives are expected to enhance margins, and its strong solvency position offers resilience in challenging market conditions. Supported by a solid balance sheet, MetLife is well-equipped to continue enhancing shareholder value. As such, current investors can hold onto their shares and benefit from its growth initiatives.
While MET’s long-term growth potential looks promising due to its strategic moves, it may not be the most favorable time for new investors to buy in. Domestic profits are expected to decline in the near term, and the company’s reliance on investment income could leave it exposed to market volatility.
Additionally, its return on invested capital stands at 1.9%, lagging behind the industry average of 2.5%, indicating potential inefficiency in capital use. Given that the stock is trading near its 52-week high, the potential for short-term gains appears limited. For these reasons, new investors might consider waiting for a more attractive entry point and monitor upcoming earnings results for further insights.