UBS Raises Price Target on MetLife (MET) Following Investor Day
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UBS reiterated a Neutral rating on MetLife (NYSE: MET), and raised the price target to $54.00 (from $48.00), following the company's investor day. Management identified several growth areas including Group benefits, Latin America, and P&C and anticipates its international earnings to grow in proportion. The company also anticipates a near-term ROE spread over risk-free rate of 8%, rising to 9-10% over time. The Board has authorized a $3bn share repurchases program to be completed by the end of 2017.
Analyst Brian Meredith commented, "MET hosted its Investor day this morning, whereby management discussed the strategy, opportunities and challenges. Management identifies several growth areas including Group benefits, Latin America, and P&C and anticipates its international earnings to grow in proportion. It also intends to maximize free cash flow and profitability at MetLife Holdings, while winding down the operation. MET notes all new business require IRR above hurdle rate and short payback period. After separation of Brighthouse (BHF), management estimates an average free cash flow ratio of 65-75% for 2017 and 2018 and continues to target an $800mm net annual savings by 2020."
Shares of MetLife closed at $53.74 yesterday.
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