BHF - Barclays revises Brighthouse Financial estimates on negative equity market performance

Barclays has lowered its price target on Brighthouse Financial ( NASDAQ: BHF ) from $55 to $44 as it adjusts estimates across its life insurance coverage ahead of 2Q22 earnings to reflect negative equity market performance and valuation contraction amid negative investor sentiment.

The bank kept an Equal Weight/Neutral on Brighthouse ( BHF ), stating that "BHF is the most pro-cyclical stock in our coverage, better than expected equity markets and interest rates should boost earnings corresponding to its distributable earnings ( DE ). Though we view progress towards meeting its DE as opaque."

Furthermore, Barclays lowered its 2Q22 EPS estimate on the stock, from $3.33 previously to $2.29, that reflects higher DAC, deteriorating investment performance on separate accounts/related fee income, and after-tax COVID-19 mortality losses of $8mn (vs. our previous estimate of $12M).

The life insurer reported earnings per share of $4.07 on revenue of $2.74B (+12.8% Y/Y) in Q1 . It is scheduled to report its Q2 results on Aug. 05, 2022.

Barclays ratings is in line with SA Quant and SA Authors' rating of hold. Earlier this month, Piper Sandler also cut price target on Brighthouse Financial ( BHF ) from $50 to $43, while maintaining neutral rating.

Take a look at how Brighthouse Financial's key stats compare with those of its peers here .

BHF shares are down ~5% today and 26% YTD

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