BHF - Brighthouse: A Weak Q1 But Headwinds Are Reflected In Valuation

2024-05-09 22:49:18 ET

Summary

• Brighthouse Financial shares plunged 10% after disappointing quarterly results, leaving them only marginally up from a year ago.
• The company reported a profit from an adjusted loss by excluding actuarial adjustments, but investors are concerned about the reinsurance rate increase.
• Despite strong sales momentum, capital consumption from SHIELD growth is a challenge for the company.
• Even with lessened free cash flow, shares are relatively cheap and buybacks will continue to be meaningful.

Shares of Brighthouse Financial ( BHF ) plunged 10% on Wednesday after reporting disappointing quarterly results. With these losses, shares are only up marginally from a year ago. I last covered the stock in January , reiterating BHF as a “buy.” With Wednesday’s decline, they are now down a disappointing 10% while the market has returned over 8%. With new financials and poor performance, it is time to re-evaluate BHF....

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