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

Credit Suisse wonders whether Metlife Inc (NYSE: 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.