MetLife, Inc. MET is on the cusp of eclipsing the fourth-quarter 2023 earnings forecast, with results expected to be unveiled on Jan 31, post-market close. Prospects indicate a sustained uptick in net investment income and profits across most international operations.
Analyst Projections
The Zacks Consensus Estimate for fourth-quarter earnings per share of $1.95 underscores a 25.8% surge from the prior-year figure of $1.55, with no change over the past week. Additionally, the consensus estimate for fourth-quarter revenues of $18.1 billion points to a 14.1% rise from the year-ago reported figure.
MetLife outperformed the consensus estimate for earnings in one of the trailing four quarters and fell short on the other three occasions, with an average negative surprise of 6.2%. This pattern is depicted in the graph below:
Quantitative Model Assessment
Nevertheless, our proven model forecast a probable earnings beat for MetLife this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) enhances the likelihood of an earnings beat, which holds true in this case.
Earnings ESP: MetLife has an Earnings ESP of +1.54%. This is due to the Most Accurate Estimate currently standing at $1.98 per share, surpassing the Zacks Consensus Estimate of $1.95. You can discover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: MetLife currently holds a Zacks Rank #3.
Q3 Performance Recap
In the last reported quarter, the premier insurance-based global financial services organization delivered adjusted operating earnings per share of $1.97, trailing the Zacks Consensus Estimate by 1% due to higher net derivative losses. However, the negatives were partly counterbalanced by reduced expenses, higher investment returns, volume growth in certain segments, and enhanced contributions from the U.S., Latin America, and EMEA businesses.
Now, let’s assess the factors leading up to the fourth-quarter earnings declaration.
Drivers of Q4 Performance
Rising premiums from most business segments and investment income are anticipated to have bolstered MetLife’s fourth-quarter performance. Enhanced operations in domestic and international markets, particularly in Asia and Latin America, stand out as significant positives.
The Zacks Consensus Estimate for total premiums for the quarter under review proposes a 20% surge from the prior-year period. Likewise, the consensus mark for net investment income indicates a more than 9% year-over-year upturn from the same period, driven by the high interest rate environment and burgeoning private equity returns.
Improved profits from the U.S., Asia, and Latin American operations are expected to have positioned the company for substantial growth from the corresponding period and a potential earnings beat. A burgeoning variable investment income is likely to have aided the Asia segment, while the Latin America business is expected to have reaped rewards from amplified volumes and favorable underwriting.
The Zacks Consensus Estimates for adjusted earnings from U.S., Asia, and Latin American operations denote nearly 8%, 105%, and 18% year-over-year growth, respectively. Additionally, the consensus estimate for Group Benefits’ adjusted earnings suggests a 4.2% hike from the prior-year quarter’s figure. The company is projected to have witnessed an 11.6% profit upturn in Retirement & Income Solutions.
Nevertheless, escalating costs and expenses are anticipated to have partly offset the profit growth levels in the to-be-reported quarter. Furthermore, the consensus estimate hints at a 1% year-over-year dip in Universal Life and Investment-Type Product Policy Fees for the fourth quarter. Likewise, the consensus estimate for adjusted earnings from the EMEA operations suggests a nearly 5% decline from the prior year. Moreover, the consensus mark for MetLife Holdings’s adjusted earnings indicates a nearly 10% year-over-year drop in the fourth quarter.
Other Stocks to Consider
Here are some other companies worth considering from the broader Finance space, as our model indicates that these entities possess the requisite elements to deliver an earnings beat this time around:
CNO Financial Group, Inc. CNO presents an Earnings ESP of +8.24% and a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for CNO Financial’s bottom line for the upcoming quarter suggests a 51.8% year-over-year surge to 85 cents per share, with no change over the past week. The consensus mark for CNO’s revenues is pegged at $934.1 million.
Everest Group, Ltd. EG boasts an Earnings ESP of +1.18% and is a Zacks #3 Ranked player.
The Zacks Consensus Estimate for Everest’s bottom line for the impending quarter indicates a 19.8% year-over-year advancement. The estimate remained steady over the past week. Furthermore, EG outperformed earnings estimates in three of the past four quarters and fell short once, with the average surprise standing at 24.5%.
Arch Capital Group Ltd. ACGL presents an Earnings ESP of +1.24% and a Zacks Rank of 3.
