MetLife Inc. MET is scheduled to report first-quarter 2017 results on May 3, after market close.
Last quarter, the company surpassed the Zacks Consensus Estimate by 0.75%. Let’s see how things are shaping up for this announcement.
Q1 Flashback
We expect the company’s Property and Casualty segment to suffer from the underperforming auto insurance business. The company has been taking targeted rate increases in auto insurance over the last past one year and will continue doing so in 2017. These price increases, along with other management actions, will drive the combined ratio higher. Overall P&C sales might also suffer due to price increases and management actions to drive value.
In its Japan business, we expect sales to decline as the company shifts its sales to higher return foreign currency-denominated life products from low-return yen life products.
In its EMEA segment, we expect to see an increase in sales led by a favorable shift toward higher-margin products.
In the Group Benefits segment, the company disclosed a strong start to the 2017 sales and renewal season. It witnessed continued strong persistency and solid sales across all market segments, as well as in both core and voluntary products.
The company’s bottom line will be aided by its expense management initiatives.
The company has been generating enough free cash flow which it uses for investment purposes along with buying back shares. Shares bought back in the quarter will add to the bottom line.
Currency fluctuation will likely impart volatility to earnings.
MetLife, Inc. Price and EPS Surprise
MetLife, Inc. Price and EPS Surprise | MetLife, Inc. Quote
Earnings Whispers
Our proven model does not conclusively show that MetLife is likely to beat on earnings this quarter. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank of #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. That is not the case here as you will see below.
Zacks ESP: MetLife has an Earning ESP of 0.00%. This is because the Most Accurate estimate stands at $1.27 per share, in line with the Zacks Consensus Estimate. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: MetLife carries a Zacks Rank #4 (Sell). We caution against Sell-rated stocks (Zacks Rank #4 or 5) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks That Warrant a Look
Here are some companies that you may consider as our model shows that these have the right combination of elements to post an earnings beat this quarter:
Prudential Financial Inc. PRU will report first-quarter 2017 earnings results on May 3. The company has an Earnings ESP of +0.38% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.