MetLife Q3 Earnings: Is NYSE:MET Cheap at 0.4x Price/Book?

in EARNINGS/INVESTING IDEAS by

MetLife, Inc. (NYSE:MET) is scheduled to report Q3 earnings results after markets close for trading on November 4, 2020.

The company is expected to report earnings of $1.58/share on revenue of $16.001 billion. The consensus earnings per share (EPS) of $1.58/share is based on a poll of 11 analysts and represents a growth in eps of 24.1% over the same quarter last year, when the company reported earnings of $1.27/share.

The revenue forecast of $16.001 billion based on a poll of 4 analysts implies a year-over-year (YoY) decline in revenue of −5.4%. Last year the company reported $16.918 billion in revenue for the quarter.

Expected to report EPS growth of 24.1% for Q3, 2020
Metric Expected Prior Year YoY Change
Revenue $16,000.92 $16,918.00 −5.4%
EPS $1.58 $1.27 24.1%

Earnings Call Trends

Historically, management has exceeded analyst expectations 6 out of the last 8 tracked quarters, and missed expectations 2 quarters.

What are your expectations from MetLife, Inc. for earnings this quarter? Let us know in the comments!

Analyst Expected vs. Reported EPS
Quarter Expected Reported Surprise Result
Q2, 2020 $0.91 $0.83 −9.0% Missed
Q1, 2020 $1.44 $1.58 10.0% Beat
Q4, 2019 $1.38 $1.98 43.8% Beat
Q3, 2019 $1.40 $1.27 −9.0% Missed
Q2, 2019 $1.34 $1.38 3.2% Beat
Q1, 2019 $1.27 $1.48 16.2% Beat
Q4, 2018 $1.29 $1.35 5.0% Beat
Q3, 2018 $1.26 $1.38 9.4% Beat

In the following table, we summarize the company’s stock price movements after earnings releases. The “Price Day Prior” column shows the closing stock price on the day before the earnings report, and the “Price Next Day” column shows the stock price at the end of the trading day after the earnings report. After the last earnings report for the period ending June 30, 2020, the stock price did not react much to the update.

Stock Price Performance After Earnings
Report Date Price Day Prior Price Next Day Change % Result
August 5, 2020 $36.90 $36.98 0.2% Increase
May 6, 2020 $34.27 $34.44 0.5% Increase
February 5, 2020 $50.20 $51.87 3.3% Increase
October 30, 2019 $46.68 $46.79 0.2% Increase

Fundamentals And Technical Analysis

MetLife, Inc. is currently trading at $36.75/share, down −2.7% for the day. The company is trading at approximately 69.2% of its 52-week high of $53.28/share. The company’s stock price is down −0.6% since the last earnings report and down −6.1% over the previous week. The company’s 14 Day Relative Price Index (RSI) of 42.49 suggests the company is trading in technically neutral territory. The RSI is considered overbought when above 70 and oversold when below 30.


NYSE:MET Stock Price Chart
Source: Finbox

The current share price implies a price-to-earnings (P/E) multiple of 4.70 and a forward P/E multiple of 7.10.

MetLife, Inc.’s current share price also implies a price-to-book (P/B) multiple of 0.44. The following table summarizes some other key fundamental ratios:

Data as of October 28, 2020
Metric Value
Last Reported Fiscal Period Key FY2020.Q2
Period End Date June 30, 2020
Stock Price (Current) $36.75
P/E Ratio 4.7x
P/E Ratio (Fwd) 7.1x
PEG Ratio 0.2
Total Debt / Total Capital 76.3%
Levered Free Cash Flow $12.02 billion
EV / EBITDA −24.6x

Finbox

MetLife, Inc. is a large-cap stock with a market capitalization of $34.282 billion and a total enterprise value of $121.3 billion. The company operates in the Financials sector and the Insurance industry.

MetLife, Inc. engages in the insurance, annuities, employee benefits, and asset management businesses worldwide. It operates through five segments: U.S.; Asia; Latin America; Europe, the Middle East and Africa; and MetLife Holdings. The company offers life, dental, group short-and long-term disability, individual disability, accidental death and dismemberment, vision, and accident and health coverages, as well as prepaid legal plans; administrative services-only arrangements to employers; and stable value products, including general and separate account guaranteed interest contracts, and private floating rate funding agreements. It also provides pension risk transfers, institutional income annuities, tort settlements, and capital markets investment products; and other products and services, such as life insurance products and funding agreements for funding postretirement benefits, as well as company, bank, or trust-owned life insurance used to finance nonqualified benefit programs for executives. In addition, the company offers automobile, homeowners’, and personal excess liability insurance products. Further, it provides fixed annuities and pension products; medical and credit insurance products; variable, universal, term, endowment, and whole life insurance products; variable, and fixed and indexed-linked annuities; and protection against long-term health care services. The company serves individuals, corporations and their employees, and other institutions and their members through independent agents, property and casualty specialists, sales forces, sales teams and relationship managers, and sponsoring organizations and affinity groups, as well as through career and independent agencies, bancassurance, direct marketing and e-commerce, brokers, and other third-party distribution channels. MetLife, Inc. was founded in 1863 and is headquartered in New York, New York.

Expertise: financial modeling, mergers & acquisitions. Andy is also a founder at finbox.io, where he’s focused on building tools that make it faster and easier for investors to do investment research. Andy’s background is in investment banking where he led the analysis on over 50 board advisory engagements involving mergers and acquisitions, fairness opinions and solvency opinions. Some of his board advisory highlights: - Sears Holdings Corp.’s $620 mm spin-off via rights offering of Sears Outlet, Hometown Stores and Sears Hardware Stores. - Cerberus Capital Management’s $3.3 bn acquisition of SUPERVALU Inc.’s New Albertsons, Inc. assets. Andy can be reached at andy@finbox.io or at +1 (516) 778-6257.

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