Shares of Metlife Inc (NYSE:MET) are trading siginficantly higher in the pre-market this morning, The stock is up $3.41 or 8.12% after the company announced plans to spin off their retail segment. The exact approach that Metlife Inc (NYSE:MET) will be taking remains unclear, but the company has been contemplating either an IPO of the spinoff, a complete sale of the retail segment, or a spinoff where current Metlife shareholders would own 100% of the new entity.
We do know that the following entities will make up the new retail segment: MetLife Insurance Company USA, General American Life Insurance Company, Metropolitan Tower Life Insurance Company and several other subsidiaries. The new segment would also consist of around 20% of Metlife’s operating earnings.
“At MetLife our goal is to create long-term value for our shareholders and deliver exceptional customer experiences,” explained Steven A. Kandarian, MetLife chairman, president and CEO. “As a result of our Accelerating Value strategic initiative, MetLife has been evaluating opportunities to increase sustainable cash generation and is directing capital to businesses where we can achieve a clear competitive advantage and deliver a differentiated value proposition for customers. This analysis considers the regulatory and economic environment in each market where we do business. We have concluded that an independent new company would be able to compete more effectively and generate stronger returns for shareholders.”
We will be following Metlife Inc (NYSE:MET) closely over the next several weeks as new clues on their plans emerge. The stock closed at $41.99 during the last trading session. It is down 23.18% since June 9, 2015 and is downtrending. It has underperformed the S&P500 by 15.70%.
From a total of 3 analysts covering MetLife (NYSE:MET) stock, 1 rate it a “Buy”, 0 a “Sell”, and 2 a “Hold”. This means that 33% of the ratings are positive. The highest target price is $62 while the lowest target price is $56. The mean of all analyst targets is $57.50 which is 36.94% above today’s ($41.99) stock price. MetLife was the topic of 4 analyst reports since July 31, 2015 according to the firm StockzIntelligence Inc. Citigroup downgraded shares on January 5 to a “Neutral” rating.
The institutional sentiment increased to 1.14 in Q2 2015. It’s up 0.07, from 1.07 in 2015Q2. The ratio is positive, as 63 funds sold all their Metlife Inc shares they owned while 335 reduced their positions. 65 funds bought stakes while 390 increased their total positions. Institutions now own 772.00 million shares which is 7.74% less than the previous share count of 836.80 million in 2015Q2.
Tegean Capital Management Llc holds 10.57% of its total portfolio in Metlife Inc, equating to 335,000 shares. Sls Management Llc owns 218,588 shares representing 7.87% of their total US portfolio. Moreover, Kr Capital Advisors Inc has 7.73% of their total portfolio invested in the company, equating to 230,683 shares. The New Jersey-based Redwood Capital Management Llc has a total of 7.29% of their portfolio invested in the stock. Capital Returns Management Llc, a New York-based fund reported 336,070 shares owned.
MetLife, Inc. is a provider of life insurance, annuities, employee benefits and asset management. The company has a market cap of $46.68 billion. The Company’s divisions include Retail; Group, Voluntary & Worksite Benefits, and Corporate Benefit Funding. It has 8.14 P/E ratio. The Company’s three geographic divisions are Latin America (collectively, the Americas); Asia, and Europe, the Middle East and Africa (EMEA).