Results: Brighthouse Financial, Inc. Delivered A Surprise Loss And Now Analysts Have New Forecasts
Brighthouse Financial, Inc. (NASDAQ:BHF) came out with its quarterly results last week, and we wanted to see how the business is performing and what industry forecasters think of the company following this report. Things were not great overall, with a surprise (statutory) loss of US$7.72 per share on revenues of US$2.0b, even though the analysts had been expecting a profit. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.
View our latest analysis for Brighthouse Financial
Taking into account the latest results, the consensus forecast from Brighthouse Financial's eight analysts is for revenues of US$8.10b in 2023, which would reflect a satisfactory 4.8% improvement in sales compared to the last 12 months. Earnings are expected to improve, with Brighthouse Financial forecast to report a statutory profit of US$12.30 per share. In the lead-up to this report, the analysts had been modelling revenues of US$8.22b and earnings per share (EPS) of US$9.93 in 2023. Although the revenue estimates have not really changed, we can see there's been a massive increase in earnings per share expectations, suggesting that the analysts have become more bullish after the latest result.
There's been no major changes to the consensus price target of US$48.60, suggesting that the improved earnings per share outlook is not enough to have a long-term positive impact on the stock's valuation. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. The most optimistic Brighthouse Financial analyst has a price target of US$60.00 per share, while the most pessimistic values it at US$42.00. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.
One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. One thing stands out from these estimates, which is that Brighthouse Financial is forecast to grow faster in the future than it has in the past, with revenues expected to display 6.4% annualised growth until the end of 2023. If achieved, this would be a much better result than the 0.6% annual decline over the past five years. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to grow 5.9% annually. So it looks like Brighthouse Financial is expected to grow at about the same rate as the wider industry.
The Bottom Line
The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Brighthouse Financial's earnings potential next year. They also reconfirmed their revenue estimates, with the company predicted to grow at about the same rate as the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.
With that in mind, we wouldn't be too quick to come to a conclusion on Brighthouse Financial. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Brighthouse Financial analysts - going out to 2025, and you can see them free on our platform here.
It might also be worth considering whether Brighthouse Financial's debt load is appropriate, using our debt analysis tools on the Simply Wall St platform, here.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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