The most recent earnings announcement MetLife, Inc.'s (NYSE:MET) released in December 2018 revealed that the business experienced a small tailwind, leading to a single-digit earnings growth of 1.8%. Below is a brief commentary on my key takeaways on how market analysts predict MetLife's earnings growth outlook over the next few years and whether the future looks even brighter than the past. I will be looking at earnings excluding extraordinary items to exclude one-off activities to get a better understanding of the underlying drivers of earnings.
Analysts' expectations for this coming year seems pessimistic, with earnings reducing by -6.6%. But in the following year, there's contrast in performance, with earnings growth rates generating double digit 2.4% compared to today’s level before decreasing. to US$4.8b in 2022.
While it’s informative knowing the growth each year relative to today’s level, it may be more valuable to estimate the rate at which the earnings are growing on average every year. The advantage of this approach is that we can get a better picture of the direction of MetLife's earnings trajectory over the long run, irrespective of near term fluctuations, be more volatile. To compute this rate, I've appended a line of best fit through analyst consensus of forecasted earnings. The slope of this line is the rate of earnings growth, which in this case is 0.4%. This means, we can assume MetLife will grow its earnings by 0.4% every year for the next few years.
For MetLife, I've compiled three key aspects you should further examine:
- Financial Health: Does it have a healthy balance sheet? Take a look at our free balance sheet analysis with six simple checks on key factors like leverage and risk.
- Valuation: What is MET worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether MET is currently mispriced by the market.
- Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of MET? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!
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