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What Can We Expect from MetLife in 4Q17?

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Jan. 18 2018, Updated 11:57 a.m. ET

Revenue expectations

MetLife (MET) calculates its total revenue via the summation of its premiums, net investment income, policy fees, other revenue, and adjustments related to its net investment gains and net derivative gains. 

Wall Street analysts have given a consensus estimate of $15.4 billion for MetLife’s 4Q17 revenue, which reflects a fall on a YoY (year-over-year) basis.

However, analysts have given a high estimate of $16.0 billion and a low estimate of $15.1 billion for MetLife’s 4Q17 revenue. Moreover, in its 2018 guidance call, the company stated that its group benefits business is expected to witness favorable momentum in the span of one to three years.

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Earnings expectations

Analysts’ consensus estimate for MetLife’s EPS (earnings per share) for 4Q17 reflects declining momentum on a YoY basis. The high estimate for MET’s 4Q17 EPS stood at $1.14, and the low estimate stood at $0.94. Analysts have given an average estimate of $1.07.

In MetLife’s guidance call, its management stated that its retirement and income solutions (or RIS) business would remain in the pension risk transfer market. The business’s liability exposures are expected to show upward momentum within the horizon of one to three years. In the first nine months of 2017, the company posted net income of $1.6 billion compared to $2.9 billion in the first nine months of 2016.

MetLife has an enterprise value of $78.5 billion. Its peers (XLF) Reinsurance Group of America (RGA), CNO Financial Group (CNO), and Allstate Corporation (ALL) have enterprise values of $12.7 billion, $6.9 billion, and $39.8 billion, respectively.

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