Morgan Stanley: Are MetLife's Challenges Surmountable?

In a research report published this morning by Morgan Stanley, MetLife MET is expected to execute capital management plans throughout 2012, despite the company facing uncertainty. According to Morgan Stanley, “Our meetings in DC coupled with comments made at the recent FSOC meeting confirm that nonbank SIFI designations are unlikely until year-end or early 2013. This provides MetLife with roughly a six month window to execute capital management plans assuming no delays in relinquishing its bank charter following the planned sale of its bank this quarter. Management's current plan is to execute $2 billion of buybacks and raise the dividend to $1.10 in October. However, capital actions beyond this level are unlikely given expectations that the company will ultimately be designated a non-bank SIFI, where the rules surrounding capital regulation remain highly uncertain.” Morgan Stanley maintains its Overweight rating and $46 PT on MetLife, which closed Friday at $36.46.