Barclays on U.S. Insurance/Life: MET & HIG Investor Day Previews: 2012 EPS and ROEs Face Headwinds
Tweet
Share
E-mailGet Alerts MET Hot Sheet
Price: $69.95 --0%
Rating Summary:
18 Buy, 6 Hold, 0 Sell
Rating Trend:
Down
Today's Overall Ratings:
Up: 8 | Down: 14 | New: 10
Rating Summary:
18 Buy, 6 Hold, 0 Sell
Rating Trend:
Down
Today's Overall Ratings:
Up: 8 | Down: 14 | New: 10
Join SI Premium – FREE
Barclays on U.S. Insurance/Life: MET & HIG Investor Day Previews: 2012 EPS and ROEs Face Headwinds
Barclays analyst says, "MET is hosting an investor conference call on December 5, and HIG is hosting an Investor Day on December 8. Our sense is these stocks have largely priced in negative investor sentiment as well as concerns regarding the impact of low interest rates, a flattening yield curve, and volatile equity markets. MET's outlook could be for 2012 EPS of $5.10 and an 11% ROE including the effect of new DAC accounting changes, which should be similar to the 2011 result. We anticipate HIG could target a 2012 ROE of 7%-8% (down from its long-term goal of 11%), which implies below-consensus 2012 EPS of $3.25 and reflects headwinds from macro conditions."
"MetLife (NYSE: MET)(Overweight-rated): We are lowering our 2012 EPS outlook to $5.10 (consensus=$5.22) from our prior outlook of $5.45. This reduction is solely based on our estimate of a 6-7% impact to FY12 est. EPS from the new DAC accounting change, similar to peers such as Prudential (NYSE: PRU)."
"Hartford (NYSE: HIG)(Equalweight-rated): We expect HIG to generate operating EPS of $3.25 (consensus: $3.52) and a 7% ROE in 2012 (boosted by 50bps from the new DAC accounting change), which is better than 5% in 2011 but below peers. We expect HIG to optimize its capital structure over time & potentially divest underperforming businesses leading to ROE improvement, although at a slower pace than the company anticipates. Also, P&C profitability has stalled recently, which is a cause for concern. HIG expects to complete its $500mn share buyback authorization by early 2012-our outlook is for $125mn of share buybacks in 2011 and $750mn in 2012."
Barclays analyst says, "MET is hosting an investor conference call on December 5, and HIG is hosting an Investor Day on December 8. Our sense is these stocks have largely priced in negative investor sentiment as well as concerns regarding the impact of low interest rates, a flattening yield curve, and volatile equity markets. MET's outlook could be for 2012 EPS of $5.10 and an 11% ROE including the effect of new DAC accounting changes, which should be similar to the 2011 result. We anticipate HIG could target a 2012 ROE of 7%-8% (down from its long-term goal of 11%), which implies below-consensus 2012 EPS of $3.25 and reflects headwinds from macro conditions."
"MetLife (NYSE: MET)(Overweight-rated): We are lowering our 2012 EPS outlook to $5.10 (consensus=$5.22) from our prior outlook of $5.45. This reduction is solely based on our estimate of a 6-7% impact to FY12 est. EPS from the new DAC accounting change, similar to peers such as Prudential (NYSE: PRU)."
"Hartford (NYSE: HIG)(Equalweight-rated): We expect HIG to generate operating EPS of $3.25 (consensus: $3.52) and a 7% ROE in 2012 (boosted by 50bps from the new DAC accounting change), which is better than 5% in 2011 but below peers. We expect HIG to optimize its capital structure over time & potentially divest underperforming businesses leading to ROE improvement, although at a slower pace than the company anticipates. Also, P&C profitability has stalled recently, which is a cause for concern. HIG expects to complete its $500mn share buyback authorization by early 2012-our outlook is for $125mn of share buybacks in 2011 and $750mn in 2012."
Serious News for Serious Traders! Try StreetInsider.com Premium Free!
You May Also Be Interested In
- Stifel Downgrades Saipem (SPM:IM) (SAPMY) to Hold
- The Honest Co. (HNST) PT Lowered to $3 at Loop Capital
- Equifax (EFX) PT Lowered to $265 at Stifel
Create E-mail Alert Related Categories
Analyst CommentsRelated Entities
Barclays, Stock BuybackSign up for StreetInsider Free!
Receive full access to all new and archived articles, unlimited portfolio tracking, e-mail alerts, custom newswires and RSS feeds - and more!
