MetLife Tops Earnings Estimates; Target Price $72

MetLife, one of the world’s largest life insurers, reported better-than-expected earnings in the second quarter of 2021 and told investors its adjusted net investment income soared by 49%, mainly due to higher variable investment income from strong private equity returns.

The New York-based insurer reported a net income of $3.4 billion, or $3.83 per share, compared to net income of $68 million, or $0.07 per share, in the second quarter of 2020. Adjusted earnings of $2.1 billion, or $2.37 per share, compared to adjusted earnings of $758 million, or $0.83 per share, in the second quarter of 2020. That was higher than the Wall Street consensus estimates of $1.68 per share.

The insurance company said its net investment income was $5.3 billion, up 29% from the second quarter of 2020 and adjusted net investment income was $5.1 billion, up 49% from the prior-year period.

MetLife stock rose over 1.6% to $58.05 in extended trading on Wednesday. The shares have gained 20% so far this year.

Analyst Comments

“This quarter’s results clearly received an outsized benefit from strong alternative results; underlying results remain robust, despite the pressure of the pandemic on group insurance,” noted Nigel Dally, equity analyst at Morgan Stanley.

“Raising Estimates, Reiterate Our Overweight rating: We are raising our 2021 estimate by $0.71 to $7.84, while our 2022 moves to $7.20 (up $0.10). Our price target climbs $1 to $74, which equates to still solid upside potential, leading us to reiterate our Overweight rating on the stock.”

MetLife Stock Price Forecast

Seven analysts who offered stock ratings for MetLife in the last three months forecast the average price in 12 months of $72.00 with a high forecast of $74.00 and a low forecast of $68.00.

The average price target represents a 26.03% change from the last price of $57.13. All of those seven analysts rated “Buy”, none “Hold” or “Sell”, according to Tipranks.

Morgan Stanley gave the stock price forecast of $74 with a high of $85 under a bull scenario and $50 under the worst-case scenario. The firm gave an “Overweight” rating on the life insurer’s stock.

Several other analysts have also updated their stock outlook. BofA lowered the price objective to $69 from $71. Citigroup lifted the price target to $70 from $69. UBS upped the target price to $73 from $72.

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