What to Expect from These MetLife Businesses in 2018

In its guidance call for 2018, MetLife (MET) stated that the operating earnings and PFO (premiums, fees, and other revenues) of its Latin America business are expected to witness a rise of 8%–9% annually (on a constant-currency basis) within a period of one to three years.

Management has also stated that the company’s Chile pension business should be experiencing upward momentum going forward.

MetLife’s EMEA (Europe, the Middle East, and Africa) division is expected to see a rise of 5%–6% in the current year because of its departure from the UK retirement market. However, over the same period of time, the division is expected to show growth of 10%–11%. The division’s operating PFO could experience a rise of 8%–9% within the next one to three years.

The baseline operating earnings of MetLife’s EMEA division are expected to experience a rise of 8%–9% in the current year. Going forward, the division’s earnings are expected to improve 15%–16%.

MetLife’s holdings division is expected to witness a downtrend. The division’s operating PFO is expected to see a fall of ~5% per year in the span of one to three years. The division’s operating earnings are expected to witness a fall of ~10% in the current year. Later on, the fall may be reduced to 5%.

MetLife has a price-to-sales ratio of 0.91x on a trailing-12-month basis. On the other hand, peers (XLF) Reinsurance Group of America (RGA), Allstate Corporation (ALL), and CNO Financial Group (CNO) have price-to-sales ratios of 0.85x, 0.95x, and 1.04x, respectively, on a trailing-12-month basis.