Street View: MetLife's fundamentals hold firm despite market volatility

MetLife MET.N posted a 16% fall in second-quarter adjusted profit on Wednesday, as weaker premiums offset gains from higher investment income

Shares of insurer down ~4% to $73 in premarket trading

STRONG POLICIES, SHAKY PORTFOLIOS

J.P.Morgan ("overweight", PT: $95) expects several of the factors that weighed on MetLife's recent earnings, particularly weaker investment income and compressed margins, to improve in the coming periods

Morgan Stanley ("overweight", PT: $98) believes the recent headwinds in MetLife's Group Benefits segment—driven by elevated large claims and higher utilization in voluntary products—are likely temporary, with sequential improvement expected in the second half

Evercore ISI ("outperform", PT: $110) says it's somewhat encouraging to hear that dental margins seem to be improving after a year of some adversity

"We shall see if the unusual items in 2Q are one-timers or persist into 2H25, but the company currently views them as more likely one-timers" - Evercore ISI

Morningstar (fair value: $73) says MetLife's variable investment income is tied to alternative asset returns such as private equity and real estate, which can be highly volatile

A significant correction in capital markets could materially impact the firm's overall profitability, adds Morningstar