The Street Wonders If Metlife's Near-Term Catalysts Will Be Enough To Meet High Expectations

Credit Suisse wonders whether Metlife Inc MET has enough catalysts to meet high expectations as it started coverage of the insurer with Neutral rating and $51 target price.

Analyst John Nadel pointed out the following catalysts for Metlife:

1) "the separation of a portion of its U.S. Retail operations (to be called "Brighthouse Financial")";

2) "its court case challenging the Fed's designation of MET as a non-bank systemically important financial institution ("SIFI")"; and

3) "the likelihood that Brighthouse regulatory filings allow MET to return to the market to repurchase shares post quiet periods."

Nadel noted that investors overlooked the company's recently announced $1 billion expense initiative.

In addition, the separation details suggest Metlife should have incremental $2-$3 billion of capital flexibility over the Brighthouse spin in the first half of 2017. This reinforces the analyst's estimate of $2 billion of buybacks annually in 2017/18.

Nadel's $51 price target is based on a sum of the parts-driven 9.7x his 2017 estimated EPS of $5.84, or $56, less a 10 percent "SIFI discount" to incorporate regulatory risk.

At time of writing, shares of Metlife were down 0.32 percent to $47.