On Friday, MetLife (NYSE:MET) received a continued vote of confidence from Keefe, Bruyette & Woods, as the firm reiterated an Outperform rating and a $97.00 price target for the insurance giant's stock. The endorsement follows MetLife's unveiling of its New Frontier strategy, which includes ambitious new five-year targets.
MetLife's strategy announcement was met with approval, as the targets presented are seen to either meet or slightly exceed expectations. The company, which maintains an impressive "GOOD" financial health score according to InvestingPro, having surpassed its previous five-year Next (LON:NXT) Horizon goals, now aims for a 15-17% return on equity (ROE), over 6% annual earnings growth, more than 10% annual growth in earnings per share (EPS), a 100 basis point improvement in expense ratio, and in excess of $25 billion in five-year free cash flow.
The insurance firm's successful track record has set a solid foundation for its future objectives. With a focus on strategic growth and efficiency, MetLife is poised to leverage its scale advantages and strong positions in lucrative markets. The company plans to invest in growth initiatives while simultaneously cutting unit costs, a dual approach that is expected to yield dividends.
According to the firm, MetLife's diversified portfolio and robust new business returns, which come with reduced risk, are key components of its ongoing success. The New Frontier strategy is seen not just as a continuation of MetLife's proven approach, but also as a means to accelerate growth going forward.
The positive outlook for MetLife reflects a belief in the company's capacity to maintain its market leadership and deliver on its financial targets, thereby providing value to its shareholders. The reiterated price target of $97.00 underscores this confidence.
In other recent news, MetLife has been making strategic moves aimed at boosting growth and returns. Piper Sandler has reaffirmed its Overweight rating on MetLife, maintaining a $92.00 price target. The firm's confidence is rooted in MetLife's new strategic plan, the "New Frontier," which aims to achieve double-digit adjusted earnings per share (EPS) growth and a 15% to 17% return on equity by 2024. MetLife also plans to reduce its direct expense ratio by 100 basis points.
In partnership with General Atlantic, MetLife plans to launch Chariot Reinsurance in the first half of 2025. This venture will leverage third-party capital to pursue growth opportunities beyond what MetLife could achieve with its own balance sheet. MetLife Investment Management is expected to take over asset management responsibilities for Chariot Re.
The company recently reported mixed Q3 2024 earnings with adjusted earnings of $1.4 billion, or $1.93 per share, marking a decrease from the previous year. Despite declines in earnings for Group Benefits and Retirement and Income Solutions segments, and a 6% fall in Asia's adjusted earnings, the company reported a 9% increase in Latin America's adjusted earnings.
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