MetLife Stock Rebound Straddling Key Line Of Resistance
MetLife Inc (NYSE: MET) shares seem to be running into a wall of resistance just above current levels after nearly a 10-percent rally since the mid-October low. The folks at MetLife are ever-vigilant for the next growth catalyst in this difficult (for the insurers), low-rate environment.
Have they found one yet? Will they be able to find one?
What The Bulls See
• A healthy dividend of 2.6 percent annually.
• Some cheap valuation metrics: an enterprise value of $97.4 billion versus a market capitalization of $60.14 billion, a price-to-book ratio of 0.86 and a price-to-sales ratio of 0.82.
• Net profit margins of 7.7 percent.
• Relatively healthy balance sheet metrics: a debt-to-equity ratio of 80.75 and a current ratio of 1.31.
What The Bears See
• A not-so-expensive PE ratio of around 9 compared to estimated 2015 growth in revenues and EPS of 3.6 percent and 6.1 percent, respectively.
The Technical Take
The technicians note that MetLife stock has key "correction resistance" at the $53.87 to $54.40 range. With overbought Williams %R readings and the stock starting to pull back after testing the lower edge of the resistance range, the technical caution flags are out on MetLife shares. The first few support levels for MetLife stock come in at $52, $51.39 and $51. If $54.40 is conquered on a closing basis, the next two upside projections come in at $54.96 and $55.64.
MetLife appears to be poised to pull back after testing key resistance at $53.87. Aspiring MetLife longs will be trying entries at any one of the three support levels outlined above. On the other hand, short-sellers are likely to be entering between current levels and the $54.40 resistance level. The stock's valuation is cheap enough that being stubborn with short positions on any close above resistance might be very dangerous.
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