The firm noted that the stock is cheap on a valuation basis with leverage to higher interest rates.
"That's MET right now but that's also been MET for quite some time and in our view, it is not a sufficient reason to recommend the stock," analysts said.
However, analysts did highlight some key investment positives which include leading positions in just about every market/product in which MET competes lead to strong scale efficiencies, and an intense focus by management on improving free cash flow generation.
The New York-based company provides life insurance, annuities, employee benefits, and asset management products.
In Tuesday's afternoon trading session, shares of MetLife are gaining 1.45% to $53.03.
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 revenue growth, impressive record of earnings per share growth, compelling growth in net income, attractive valuation levels and good cash flow from operations. We feel its strengths outweigh the fact that the company shows low profit margins."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth came in higher than the industry average of 9.5%. Since the same quarter one year prior, revenues slightly increased by 6.4%. Growth in the company's revenue appears to have helped boost the earnings per share.
- 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 two years. We feel that this trend should continue. During the past fiscal year, METLIFE INC increased its bottom line by earning $5.42 versus $2.91 in the prior year. This year, the market expects an improvement in earnings ($5.89 versus $5.42).
- 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 62.5% when compared to the same quarter one year prior, rising from $1,328.00 million to $2,158.00 million.
- Net operating cash flow has slightly increased to $2,686.00 million or 8.13% when compared to the same quarter last year. Despite an increase in cash flow, METLIFE INC's cash flow growth rate is still lower than the industry average growth rate of 21.13%.
- You can view the full analysis from the report here: MET Ratings Report