Shares of MetLife, Inc. MET have exhibited a downtrend up to now this 12 months because of the diff
Shares of MetLife, Inc. MET have exhibited a downtrend up to now this 12 months because of the difficult financial and working surroundings triggered by the COVID-19 pandemic.
Notably, within the first 9 months of 2020, the corporate’s revenues declined 7.7% 12 months over 12 months resulting from a decline in premiums throughout all its main geographic segments, particularly United States, Asia, Latin America and EMEA. Additionally, a low rate of interest surroundings precipitated a decline within the internet funding earnings, which is one other income driver.
The corporate expects a hostile face-to-face international gross sales panorama and muted gross sales throughout most segments. This, in flip, could put stress on the highest line.
Additionally, the low rate of interest surroundings (which is predicted to proceed via 2023) would possibly exert stress on internet funding earnings due to smooth funding yields.
Nonetheless, strategic measures taken by the corporate to give attention to high-growth areas and discard non-core companies will streamline its enterprise and restore traders’ confidence within the inventory. To this finish, the corporate lately introduced that it’ll promote its unit, Metropolitan Property and Casualty Insurance coverage Firm and sure wholly owned subsidiaries to Farmers Group, Inc. (FGI), a subsidiary of Zurich Insurance coverage Group.
The deal valued at $3.94 billion is more likely to shut within the second quarter of 2021. Additionally, in October 2020, the corporate offered its wholly-owned subsidiary MetLife Seguros de Retiro S.A. Earlier in June 2020, it divested its two wholly-owned subsidiaries MetLife Restricted and Metropolitan Life Insurance coverage Firm of Hong Kong Restricted (collectively, MetLife Hong Kong).
Through the third quarter of 2020, the corporate booked the sale of its annuity enterprise in Argentina, which was not the appropriate match for MetLife. With no materials influence on the corporate, this divestiture helps illustrate its ongoing strategy of planting and pruning in a bid to attain the optimum enterprise combine.
Other than promoting its non-profitable companies, the corporate is shopping for operations that include a strategic worth. Lately, it purchased the imaginative and prescient care firm Versant Well being for $1.675 billion. With this buyout, MetLife made inroads into the imaginative and prescient insurance coverage market and expanded its bouquet of Group Insurance coverage choices.
In January this 12 months, MetLife acquired PetFirst, which enabled it to foray into the rising pet insurance coverage market.
The corporate additionally resumed its share buyback applications, which is able to present a cushion to its backside line.
We imagine, these strategic initiatives coupled with the corporate’s operational excellence will assist the inventory regain its misplaced momentum within the coming quarters.
MetLife’s shares have misplaced 4.5% 12 months thus far in contrast with the business’s decline of 8.5%.
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Different shares in the identical area together with Prudential Monetary, Inc. PRU, American Worldwide Group, Inc. AIG and American Monetary Group, Inc. AFG have misplaced 12.9%, 22.3% and 18.6%, respectively, over the identical time interval.
MetLife carries a Zacks Rank #3 (Maintain), at the moment. You’ll be able to see the whole record of in the present day’s Zacks #1 Rank (Sturdy Purchase) shares right here.
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Prudential Monetary, Inc. (PRU): Free Inventory Evaluation Report
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