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The Trefis price estimate for MetLife's stock is around $51 per share
Trefis Price Estimate for MetLife
MetLife provides life insurance, accident & health insurance, retirement & savings, and credit insurance services.
Its end users include both retail customers and corporates.
Its business model faces stiff challenges and competition from offerings by its global competitors such as: American International Group Inc., Hartford Financial Services Group Inc, Prudential Financial, New York Life and Travelers.
MetLife Earnings: Performance and 2019 ForecastMetLife Revenues: How Does MetLife Makes Money?MetLife Stock (NYSE:MET)More Trefis Insurance Industry Data
#1 Estimating MetLife's Total Revenues:
#1.1 Forecasting MetLife's U.S Segment Revenues
MetLife is heavily dependent on U.S segment , as it has contributed more than 47% of the total revenues over the last four years.
We expect the segment revenues to decrease by 8% y-o-y in 2019 driven by 12% drop in premiums, partially offset by 3% growth in net investment income.
U.S. Segment [=A+B+C+D]
Universal Life and Investment-Type Product Policy Fees [B]
Net Investment Income [C]
Other Revenues [D]
#1.2 Forecasting MetLife's Total Revenues
MetLife is expected to report $69.5 billion in Total Revenues for 2019, which is 2% more as compared to the previous year.
Although U.S segment revenues are expected to drop 8% y-o-y, 37% jump in MetLife Holdings & Corporate segment would more than offset its impact on top line.Further, Asia, Latin America and EMEA segment are expect to report a slight growth driven by increase in premiums.
Our Interactive Dashboard Analysis, How Does MetLife Make Money?, Provides An In Depth View Of The Company's Revenues.
Total Revenue [=A+B+C+D+E]
U.S. Segment [A]
Asia Segment [B]
Latin America Segment [C]
EMEA Segment [D]
Metlife Holdings & Corporate [D]
#2 Deriving MetLife's Net Income Figure:
MetLife is expected to have a Net Income of $6.9 billion in 2019 which is 38% more than previous year.
This increase is mainly due to jump in expected net income margin from 7.3% in 2018 tp 9.9% in the current year, partially offset by higher Tax Rate as compared to 2018.Higher Net Income Margin would be driven by decrease in expense figure by 2% y-o-y.
Net Income attributable to common shareholders [=A*B]
Total Revenue [A]
Net Income Margin [B]
#3 Deriving MetLife's EPS Figure :
The EPS figure has fluctuated over the last 4 years. It decreased from $10.96 in 2015 to $0.67 in 2016, before improving to $3.62 in 2017 and $4.91 in 2018. We expect this upward movement to continue in 2019 and enable MetLife to report an EPS of $6.87.
EPS growth from 2018 can be attributed to higher Adjusted Net Income and lower Shares Outstanding.
EPS Diluted [=A/B]
Net Income attributable to common shareholders [A]
Diluted Share Count [B]
MetLife has regularly invested in share repurchases to boost shareholder returns. Its share repurchase is likely to touch $2.5 billion for the full year 2019.
#4 Estimating MetLife's Share Price:
Our Price Estimate of $51 For MetLife's Stock is based on our Detailed Valuation Model, and implies a 7.4x P/E Multiple on expected 2019 EPS of $6.87
Share Price [=A*B]
EPS Diluted [B]
Comparing MetLife's P/E multiple with that of its Peers - Prudential Financial, AIG and Hartford Financial
P/E Multiples are based on Share Price at the end of Q3, and reported (or expected) Adjusted Earnings for the full year.
MetLife's expected P/E Multiple of 7.4x in 2019 is lower than AIG's 12.2x , Hartford's 11.8x and MetLife's expected P/E of 7.4x.
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DISAGREE WITH OUR FORECASTS? CREATE YOUR OWN
1. How to save your forecasts for MetLife:
Click on the blue "Try Trefis" button in the header to create an account, then navigate back to this dashboard. Now, any changes you make to these inputs will be auto-saved as a scenario (see left panel of dashboard).
2. How to monitor your scenario vs. actual results
Once you've saved your forecast, you can "rename" your scenario by clicking on the gear icon next to the scenario (on the left panel). For more info, see this quick, 30-sec video (look at the 9 sec mark)
With your forecast saved and named, you can compare your forecasts to hundreds of other Trefis users who came up with their own forecasts. Lastly, you can share with friends and colleagues to show them how you fared and compare your forecasts to theirs.