Short Trade Idea
Enter your short position between $77.58 (Friday’s intra-day high) and $78.72 (yesterday’s intra-day high).
Market Index Analysis
- MetLife (MET) is a member of the S&P 100 Index and the S&P 500 Index.
- Both indices trade in bearish chart patterns with above-average bearish trading volumes.
- The Bull Bear Power Indicator of the S&P 500 Index is bearish with a descending trendline.
Market Sentiment Analysis
Equity futures are moderately higher this morning following yesterday’s volatile session. The impact of AI on businesses and their competitiveness continues to pressure company shares across sectors, especially amid lofty valuations. A severe disconnect exists in software companies, where their outlooks are muted, revenue growth is slowing, but most analysts increase their expectations. Minutes from January’s FOMC meeting are in the deck, while earnings from DoorDash, eBay, and Analog Devices will provide further insights into consumer spending and technology. Volatility could persist through Friday, when markets will receive January’s PCE and consumer confidence data.
MetLife Fundamental Analysis
MetLife is one of the largest global providers of insurance, annuities, and employee benefits. It serves over 90 million customers in over 60 countries. MET is one of the largest US companies by revenue.
So, why am I bearish on MET following its earnings release?
MetLife missed revenue expectations of $27.22 billion and reported $23.81 billion, while earnings per share of $2.49 beat expectations of $2.34. My bearishness stems from massive institutional outflows as retail traders continue buying, its sub-standard 2.8% annualized increase in net premiums, and deceleration in sales estimates. Other red flags include negative net revenue growth, a dismal return on assets, and weak profit margins.
Metric | Value | Verdict |
P/E Ratio | 16.24 | Bullish |
P/B Ratio | 1.78 | Bullish |
PEG Ratio | 0.62 | Bullish |
Current Ratio | Unavailable | Bearish |
ROIC-WACC Ratio | Negative | Bearish |
The price-to-earnings (P/E) ratio of 16.24 makes MET an inexpensive stock. By comparison, the P/E ratio for the S&P 500 is 29.41.
The average analyst price target for MET is $91.73. This suggests moderate upside potential with elevated downside risks.
MetLife Technical Analysis
Today’s MET Signal
- The MET D1 chart shows price action inside a bearish price channel.
- It also shows price action challenging its descending 61.8% Fibonacci Retracement Fan level.
- The Bull Bear Power Indicator is bullish with a descending trendline, nearing a bearish crossover.
- The average bearish trading volumes are higher than the average bullish trading volumes.
- MET sold off with the S&P 500 Index, a bearish confirmation.
My MET Short Stock Trade
- MET Entry Level: Between $77.58 and $78.72
- MET Take Profit: Between $65.21 and $68.97
- MET Stop Loss: Between $83.05 and $85.00
- Risk/Reward Ratio: 2.26
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