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Brighthouse Financial (BHF)
NASDAQ:BHF
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Brighthouse Financial
(NASDAQ:BHF)
49Neutral
Positive Factors
Earnings Performance
BHF reported Q4 EPS of $5.07, above estimates and consensus, indicating stronger-than-expected earnings performance.
Market Position
BHF's strong holdco cash position, lack of debt maturities until 2027 and sources of cash flow suggest sufficient capital to fund sales growth and maintain its current pace of buybacks for the next few years.
Strategic Initiatives
Strategic initiatives, including a hedging/reinsurance deal, totaled north of $400m benefit to statutory earnings.
Negative Factors
Capital Adequacy
The RBC ratio came in below its 400-450% range for FY 2024, indicating potential capital adequacy concerns.
Capital Position
BHF's capital position has been impaired over the past few quarters given hedging issues, basis risk, and capital strain from new business.
Financial Stability
Normalized statutory earnings were a loss in the quarter, contributing to a negative outlook on financial stability.
Brighthouse Financial (BHF) vs. S&P 500 (SPY)
Market Cap
$3.38B
Dividend YieldN/A
Average Volume (3M)1.00M
Price to Earnings (P/E)11.3
Beta (1Y)1.07
Revenue Growth14.74%
EPS GrowthN/A
CountryUS
Employees1,400
SectorFinancial
Sector Strength88
IndustryInsurance - Life
Share Statistics
EPS (TTM)5.17
Shares Outstanding58,060,493
10 Day Avg. Volume1,081,881
30 Day Avg. Volume1,002,781
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)0.00
Price to Cash Flow (P/CF)0.00
P/FCF Ratio0.00
Enterprise Value/Market Cap1.80
Enterprise Value/RevenueN/A
Enterprise Value/Gross Profit1.29
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$58.29Price Target Upside-1.02% Downside
Rating ConsensusHold
Number of Analyst Covering7
Brighthouse Financial Business Overview & Revenue Model
Company DescriptionBrighthouse Financial, Inc. provides annuity and life insurance products in the United States. It operates through three segments: Annuities, Life, and Run-off. The Annuities segment offers variable, fixed, index-linked, and income annuities for contract holders' needs for protected wealth accumulation on a tax-deferred basis, wealth transfer, and income security. The Life segment provides term, universal, whole, and variable life policies for policyholders' needs for financial security and protected wealth transfer. The Run-off segment manages structured settlements, pension risk transfer contracts, certain company-owned life insurance policies, funding agreements, and universal life with secondary guarantees. The company was incorporated in 2016 and is based in Charlotte, North Carolina.
How the Company Makes MoneyBrighthouse Financial generates revenue primarily through the sale of annuities and life insurance products. The company earns money from premiums paid by policyholders for life insurance coverage and from fees associated with annuity contracts. Additionally, Brighthouse Financial invests the premiums it collects in a portfolio of investments, generating investment income. This investment income is a crucial component of its revenue model as it helps to cover future policyholder benefits and company expenses. The company's earnings are also influenced by factors such as interest rate changes, mortality rates of policyholders, and the performance of its investment portfolio. Significant partnerships with financial advisors and brokers play a key role in distributing its products and expanding its customer base.
Brighthouse Financial Financial Statement Overview
Summary
Brighthouse Financial's financial performance is marked by volatility and instability. The income statement shows inconsistent revenue growth and volatile net income. The balance sheet is concerning, with negative equity and high liabilities. Cash flow is weak, with consistently negative free and operating cash flows.Income Statement
Brighthouse Financial's income statement reveals fluctuating performance with significant swings in net income over recent years. The gross profit margin remains stable due to the nature of the insurance industry, but the net profit margin is volatile, showing a stark improvement in 2024 from a significant loss in 2023. Revenue growth has been inconsistent, with a noticeable drop in 2023 followed by a rebound in 2024.45
Neutral
Balance Sheet
The balance sheet shows a concerning negative equity position in 2024, a significant deterioration from previous years. The debt-to-equity ratio is unfavorable due to negative equity, and the overall financial stability is weakened by high liabilities compared to assets, posing a risk to long-term solvency.20
Very Negative
Cash Flow
The cash flow statement highlights challenges with consistently negative free cash flow and operating cash flow in recent years. Although there was a slight improvement in operating cash flow in 2024, the overall cash flow health is weak, with substantial fluctuations in free cash flow growth and negative operating cash flow to net income ratios.30
Negative
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 4.72B | 4.12B | 8.47B | 7.14B | 8.50B | Gross Profit |
| 4.72B | 4.12B | 8.47B | 7.14B | 8.50B | EBIT |
| 0.00 | 0.00 | -24.00M | -659.00M | -1.84B | EBITDA |
| 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | Net Income Common Stockholders |
| 388.00M | -1.11B | 10.00M | -103.00M | -1.06B |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 1.87B | 3.85B | 80.77B | 94.00B | 89.84B | Total Assets |
| 238.54B | 236.34B | 225.72B | 259.84B | 247.87B | Total Debt |
| 3.15B | 3.16B | 3.16B | 3.16B | 3.44B | Net Debt |
| -1.89B | -695.00M | -959.00M | -1.32B | -672.00M | Total Liabilities |
| 233.51B | 231.33B | 220.19B | 4.22B | 5.06B | Stockholders Equity |
| -1.11B | 4.94B | 5.46B | 16.14B | 18.02B |
| Cash Flow | Free Cash Flow | |||
| -48.00M | -137.00M | -1.15B | 746.00M | 888.00M | Operating Cash Flow |
| -48.00M | -137.00M | -1.15B | 746.00M | 888.00M | Investing Cash Flow |
| -100.00M | -3.20B | -8.28B | -12.24B | -5.84B | Financing Cash Flow |
| -119.00M | 3.07B | 9.07B | 11.86B | 6.19B |
Brighthouse Financial Technical Analysis
Positive
58.89
Price Trends
55.17
Positive
53.84
Positive
50.29
Positive
Market Momentum
0.51
Negative
60.63
Neutral
86.85
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For BHF, the sentiment is Positive. The current price of 58.89 is above the 20-day moving average (MA) of 51.93, above the 50-day MA of 55.17, and above the 200-day MA of 50.29, indicating a bullish trend. The MACD of 0.51 indicates Negative momentum. The RSI at 60.63 is Neutral, neither overbought nor oversold. The STOCH value of 86.85 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for BHF.
Brighthouse Financial Risk Analysis
Brighthouse Financial disclosed 46 risk factors in its most recent earnings report. Brighthouse Financial reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Brighthouse Financial Peers Comparison
Overall Rating
UnderperformOutperform
Sector (63)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
72 Outperform | $4.75B | 7.42 | 18.12% | 2.47% | 27.35% | ― | |
69 Neutral | $5.61B | 6.63 | 9.49% | 3.72% | 3.55% | 8.91% | |
66 Neutral | $2.82B | 10.08 | 3.87% | ― | 4.06% | 10092.54% | |
65 Neutral | $5.46B | 1.74 | 43.24% | 5.65% | 47.95% | ― | |
63 Neutral | $12.46B | 9.56 | 8.14% | 17044.64% | 12.63% | -4.25% | |
59 Neutral | $3.72B | 12.98 | 12.47% | 1.69% | -0.43% | -16.22% | |
49 Neutral | $3.38B | 11.28 | 7.84% | ― | 14.74% | ― |
* Financial Sector Average
Performance Comparison
BHF
Brighthouse Financial
58.89
9.90
20.21%
CNO
CNO Financial
38.19
11.59
43.57%
GNW
Genworth Financial
6.96
0.47
7.24%
LNC
Lincoln National
33.13
6.59
24.83%
JXN
Jackson Financial Incorporation
81.62
12.89
18.75%
FG
F&G Annuities & Life Inc
35.23
-3.85
-9.85%
Brighthouse Financial Earnings Call Summary
Earnings Call Date:Feb 11, 2025
(Q4-2024)
| % Change Since: 0.68%|
Next Earnings Date:May 07, 2025
Earnings Call Sentiment Neutral
Brighthouse Financial made significant progress in sales and strategic initiatives, such as reinsurance and expense reduction. However, the company faced challenges in statutory results and capital management, resulting in a mixed outlook.Q4-2024 Updates
Positive Updates
Record Sales of Shield Product Suite
Brighthouse Financial reported record sales of its flagship Shield-level annuities product suite, totaling $7.7 billion in 2024, marking a 12% increase compared to 2023.
Life Insurance Sales Growth
Life insurance sales for the full year reached $120 million, an 18% increase over 2023.
Successful Reinsurance Transactions
Brighthouse Financial completed reinsurance transactions for a legacy block of fixed and payout annuities, and a block of universal life and variable universal life products, creating capital efficiencies and reducing required capital.
Expense Reduction
The company achieved a 7% reduction in full-year corporate expenses compared with 2023.
Capital Return to Shareholders
Brighthouse Financial repurchased $250 million of common stock in 2024, reducing the number of shares outstanding by over 50% since 2018.
Negative Updates
Statutory Results Disappointment
Statutory results in 2024 were disappointing due to the complexity of managing the variable annuity and Shield business on a combined basis, resulting in strain on statutory results.
Decline in Total Adjusted Capital
There was a $300 million decline in Total Adjusted Capital (TAC) in the fourth quarter, impacted by significant changes in interest rates and the yield curve.
Capital Contribution to BLIC
A $100 million capital contribution was made to Brighthouse Life Insurance Company to bring the combined RBC ratio to approximately 400%, the low end of the target range.
Company Guidance
During the Brighthouse Financial fourth quarter and full year 2024 earnings call, the company provided several key metrics and updates to guide stakeholders. Brighthouse Financial reported $10 billion in total annuity sales for 2024, with record sales of $7.7 billion in their flagship Shield product suite, marking a 12% increase from 2023. Life insurance sales reached $120 million, an 18% increase over the previous year. The company’s estimated combined risk-based capital (RBC) ratio was approximately 400% as of December 31, 2024, which included a $100 million capital contribution to Brighthouse Life Insurance Company. Liquid assets at the holding company were $1.1 billion, or $1 billion pro forma for the contribution. The company also returned $250 million to shareholders through share repurchases, reducing outstanding shares by over 50% since 2018. Despite challenges, Brighthouse maintained expense discipline with full-year corporate expenses down over 7% compared to 2023.Brighthouse Financial Corporate Events
Stock BuybackBusiness Operations and StrategyFinancial Disclosures
Brighthouse Financial Achieves Strong Q4 2024 Results
Positive
Feb 11, 2025
Brighthouse Financial announced its financial results for the fourth quarter and full year of 2024, revealing significant progress and growth. The company achieved a net income of $646 million in Q4 2024, reversing a loss from the same period in 2023, and reported record annuity and life insurance sales for the year. Strategic initiatives, including a reinsurance transaction and hedging strategies, contributed to an improved estimated combined RBC ratio of 400% and reduced corporate expenses by 7% compared to 2023. Additionally, Brighthouse Financial repurchased $250 million of its common stock in 2024, demonstrating a robust financial position and commitment to shareholder value.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.