MetLife Inc. was upgraded to “buy” at Goldman Sachs Group Inc. as the largest U.S. life insurer weighs scaling back or exiting businesses to meet targets for shareholder returns.
Christopher Giovanni, an equity analyst at Goldman Sachs, cited the insurer’s business review and goal of reducing variable annuity sales in a report today. He previously had a “neutral” rating on the New York-based company.
MetLife Chief Executive Officer Steven Kandarian, 59, has said “everything is on the table” as he retools the insurer after the $16 billion acquisition of American Life Insurance Co. in 2010, which added to international operations. The firm announced a deal with General Electric Co.’s finance unit last month to divest most of the deposits at MetLife Bank as the insurer seeks to limit regulation by the Federal Reserve.
MetLife’s push to reduce sales of variable annuities, the equity-linked retirement products, may “be followed by further initiatives to increase focus on its higher returning global initiative and return of capital when it (finally) abandons Fed oversight,” Giovanni said in the report.
MetLife said in October that the Fed had rejected its proposal to raise its dividend and resume share buybacks. The insurer is subject to the oversight because of its size and ownership of the bank.
MetLife rose 1.1 percent to $33.26 at 4 p.m. in New York. The insurer has slid 28 percent in the last year.
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