Jefferies analyst Suneet Kamath reopened a MetLife trading pair (New York Stock Exchange: MET(more than underperforming prudential fiscal)New York Stock Exchange: PRU).
Kamath said in a note that the gaps in both the valuation and the relative performance of the two stocks to date appear unjustified based on underlying fundamentals. for clients. Since the beginning of the year, MetLife (he met) Shares fell 24%while Prudential’s (PRU) has decreased by 13%.
The analyst said that while MetLife (MET) has more exposure to CMLs, particularly in the office, “we view its stronger capital position as a meaningful compensation.” Jefferies also expects MetLife to benefit most when sentiment improves to the point where economic concerns begin to ease.
In the business mix, Kamath expects high P/E segments to make up a larger portion of MET’s earnings (27%) than low P/E operations (9%) by 2026. While PRU’s business mix will shift toward higher P/E operations, it is estimated that It will account for just 13% of PRU 2026 earnings, with P/E operations down 20%.
He estimated that MetLife (MET) would be in a much stronger position regarding excess capital than Prudential (PRU).
In terms of credit quality, stocks are presented similarly. “At a high level, there don’t appear to be physical differences between the two,” Kamath said.
Compare MET’s metrics to the PRU here.
Note that the SA quantitative system classifies MetLife (MET) and Prudential (PRU) as both reservations.
