MetLife (MET): Raising PT On Retail Separation - FBR
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FBR Capital analyst, Randy Binner, reiterated his Outperform rating on shares of MetLife (NYSE: MET) after hosting investor meetings with management. We continue to see the retail business separation, likely in 1Q17, as a favorable catalyst that moves our price target to $54 from $51.
The analyst stated "The retail separation story will unfold this fall as we see the S-1 in late September, restated financials ahead of 3Q16 earnings, and the November investor meeting. This fall, expect a legal/regulatory catalyst around the federal appeal of the MET v. FSOC case. At this point, we think this issue has asymmetric upside, given MET’s –13% performance YTD compared to peers at –5%. Separately, it appears that the 2Q16 annuity charge was taken to set up the retail separation, and we think operating results in 2H16 should be more stable. At 79% of BV ex-AOCI and with sentiment on lifecos clearly negative, we think the overall setup is good. However, with the execution of the separation and the beginning of a $1 billion expense reduction (11% of total) in 2017, MET is also becoming more of a 2018 story."
Even though MET is becoming more of a 2018 story, the analyst raised his price target to $54 from $51.
Shares of MetLife closed at $41.79 yesterday.
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