NEW YORK (TheStreet) -- Metlife (MET) shares are down -0.6% to $54.94 on Friday after the Financial Stability Oversight Council proposed to designate the insurer as "systemically important", a designation that opens Metlife up to stricter regulatory rules.
The appointment carries with it stricter capital requirements and increased oversight from the Federal Reserve comparable to the oversight big banks like JPMorgan (JPM) and Citigroup (C) now experience.
Metlife has come out in opposition of the classification, saying that it "strongly disagrees" with the designation which has already been given to fellow insurers Prudential Financial (PRU) and AIG (AIG) .
TheDeal has in depth coverage of the regulatory process here.
TheStreet Ratings team rates METLIFE INC as a Buy with a ratings score of A-. TheStreet Ratings Team has this to say about their recommendation:
"We rate METLIFE INC (MET) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its increase in stock price during the past year, impressive record of earnings per share growth, compelling growth in net income, revenue growth and largely solid financial position with reasonable debt levels by most measures. We feel these strengths outweigh the fact that the company shows weak operating cash flow."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- Compared to where it was a year ago today, the stock is now trading at a higher level, reflecting both the market's overall trend during that period and the fact that the company's earnings growth has been robust. Looking ahead, unless broad bear market conditions prevail, we still see more upside potential for this stock, despite the fact that it has already risen over the past year.
- METLIFE INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. We feel that this trend should continue. During the past fiscal year, METLIFE INC increased its bottom line by earning $2.91 versus $1.09 in the prior year. This year, the market expects an improvement in earnings ($5.60 versus $2.91).
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Insurance industry. The net income increased by 172.1% when compared to the same quarter one year prior, rising from $502.00 million to $1,366.00 million.
- Despite its growing revenue, the company underperformed as compared with the industry average of 19.9%. Since the same quarter one year prior, revenues rose by 17.1%. Growth in the company's revenue appears to have helped boost the earnings per share.
- Despite currently having a low debt-to-equity ratio of 0.35, it is higher than that of the industry average, inferring that management of debt levels may need to be evaluated further.
- You can view the full analysis from the report here: MET Ratings Report
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