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Brighthouse Financial (BHF)
NASDAQ:BHF
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Brighthouse Financial
(NASDAQ:BHF)
Rating:49Neutral
Price Target:―
Positive Factors
Earnings Performance
BHF reported Q4 EPS of $5.07, above estimates and consensus, indicating stronger-than-expected earnings performance.
Market Demand
There is high demand for BHF’s liabilities based on a growing number of sophisticated competitors and higher levels of third-party capital seeking deals.
Strategic Initiatives
Upgrading BHF to Strong Buy, as it could unlock substantial value via a whole company sale or by using creative options to free up capital.
Negative Factors
Capital Adequacy
The RBC ratio came in below its 400-450% range for FY 2024, indicating potential capital adequacy concerns.
Financial Stability
Normalized statutory earnings were a loss in the quarter, contributing to a negative outlook on financial stability.
Uncertain Cash Flow
BHF's free cash flow, a more important driver of value, remains uncertain.
Brighthouse Financial (BHF) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$3.49B
Dividend YieldN/A
Average Volume (3M)928.03K
Price to Earnings (P/E)7.3
Beta (1Y)1.08
Revenue Growth14.74%
EPS GrowthN/A
CountryUS
Employees1,400
SectorFinancial
Sector Strength81
IndustryInsurance - Life
Share Statistics
EPS (TTM)4.01
Shares Outstanding57,408,985
10 Day Avg. Volume761,927
30 Day Avg. Volume928,028
Financial Highlights & Ratios
PEG Ratio0.10
Price to Book (P/B)0.64
Price to Sales (P/S)0.00
P/FCF Ratio8.61
Enterprise Value/Market Cap0.52
Enterprise Value/Revenue0.09
Enterprise Value/Gross Profit0.37
Enterprise Value/Ebitda-0.55
Forecast
1Y Price Target
$60.14Price Target Upside-1.07% 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 Earnings Call Summary
Earnings Call Date:May 08, 2025
(Q1-2025)
| % Change Since: 5.01%|
Next Earnings Date:Aug 06, 2025
Earnings Call Sentiment Positive
The earnings call highlighted strong sales growth in annuities and life insurance, a robust liquidity position, and ongoing progress in strategic initiatives, contributing to a positive outlook. However, the decline in fixed annuity sales, higher corporate expenses, and lower-than-expected alternative investment income present challenges. Despite these lowlights, the overall sentiment is positive due to strong capital management and strategic progress.Q1-2025 Updates
Positive Updates
Strong Annuity and Life Insurance Sales
Brighthouse Financial reported total annuity sales of approximately $2.3 billion, with $2 billion from Shield sales, which increased 3% sequentially and 5% compared with the first quarter of 2024. Life insurance sales grew by 24% compared with Q1 2024.
Holding Company Liquid Assets and RBC Ratio
The company ended the quarter with holding company liquid assets of approximately $1 billion and an estimated RBC ratio between 420% and 440%, within their target range of 400% to 450%.
Progress in Hedging Strategy
Brighthouse Financial fully transitioned to hedging new Shield annuity business on a standalone basis, simplifying their hedging strategy and improving capital efficiency.
Capital Return to Shareholders
The company repurchased $59 million of common stock in the quarter, with an additional $26 million repurchased through May 6th.
Statutory Earnings and Capital Strength
Normalized statutory earnings for the quarter were approximately $300 million, benefiting from a 25 basis point increase in the prescribed 20-year treasury yield mean reversion point.
Negative Updates
Decline in Fixed Annuity Sales
Total annuity sales were down 21% compared with the first quarter of 2024, primarily driven by lower sales of fixed annuities.
Higher Corporate Expenses
Corporate expenses in the quarter were $239 million on a pre-tax basis, higher than the run rate expectation, although expected to normalize for the remainder of 2025.
Alternative Investment Income Below Expectations
Alternative investment income was $39 million, below the quarterly average run rate expectation, with an alternative investment portfolio yield of 1.4%.
Company Guidance
During Brighthouse Financial's first quarter 2025 earnings call, the company reported holding company liquid assets of approximately $1 billion and an estimated combined risk-based capital (RBC) ratio between 420% and 440%, aligning with their target range of 400% to 450%. Total annuity sales reached approximately $2.3 billion, with Shield sales contributing around $2 billion, marking a 3% sequential and 5% year-over-year increase. Life insurance sales rose by 24% year-over-year to $36 million. The company also repurchased $59 million of its common stock in the quarter, with an additional $26 million repurchased by May 6. Corporate expenses were $239 million, exceeding the expected run rate, but are anticipated to normalize for the rest of 2025.Brighthouse Financial Financial Statement Overview
Summary
Brighthouse Financial's financial statements show volatility and instability. The income statement indicates inconsistent revenue growth and volatile net profit margins. The balance sheet is weak, with negative equity and high liabilities, raising solvency concerns. Cash flow is strained, with consistently negative free cash flow and fluctuations in operating cash flow.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 | |||||
| TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 6.91B | 4.37B | 4.12B | 8.47B | 7.14B | 8.50B | Gross Profit |
| 4.88B | 4.37B | 4.12B | 8.47B | 7.14B | 8.50B | EBIT |
| -116.00M | 574.00M | 0.00 | -24.00M | -659.00M | -1.84B | EBITDA |
| -168.00M | 574.00M | 0.00 | 0.00 | 0.00 | 0.00 | Net Income Common Stockholders |
| 613.00M | 388.00M | -1.11B | 10.00M | -103.00M | -1.06B |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 67.39B | 86.97B | 3.85B | 80.77B | 94.00B | 89.84B | Total Assets |
| 224.19B | 238.54B | 236.34B | 225.72B | 259.84B | 247.87B | Total Debt |
| 3.61B | 3.15B | 3.16B | 3.16B | 3.16B | 3.44B | Net Debt |
| 1.75B | -1.89B | -695.00M | -959.00M | -1.32B | -672.00M | Total Liabilities |
| 209.61B | 234.24B | 231.33B | 220.19B | 4.22B | 5.06B | Stockholders Equity |
| 14.52B | 4.96B | 4.94B | 5.46B | 16.14B | 18.02B |
| Cash Flow | Free Cash Flow | ||||
| 386.00M | -290.00M | -137.00M | -1.15B | 746.00M | 888.00M | Operating Cash Flow |
| 386.00M | -290.00M | -137.00M | -1.15B | 746.00M | 888.00M | Investing Cash Flow |
| -1.01B | -100.00M | -3.20B | -8.28B | -12.24B | -5.84B | Financing Cash Flow |
| 1.46B | 3.68B | 3.07B | 9.07B | 11.86B | 6.19B |
Brighthouse Financial Technical Analysis
Positive
60.79
Price Trends
56.06
Positive
55.62
Positive
51.26
Positive
Market Momentum
1.28
Positive
59.86
Neutral
35.71
Neutral
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 60.79 is above the 20-day moving average (MA) of 58.97, above the 50-day MA of 56.06, and above the 200-day MA of 51.26, indicating a bullish trend. The MACD of 1.28 indicates Positive momentum. The RSI at 59.86 is Neutral, neither overbought nor oversold. The STOCH value of 35.71 is Neutral, 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 (64)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
70 Outperform | $4.34B | 8.71 | 12.72% | 2.75% | -1.72% | 95.91% | |
69 Neutral | $6.01B | 82.04 | 1.24% | 3.58% | 3.55% | 8.91% | |
64 Neutral | $2.81B | 13.78 | 2.73% | ― | 0.98% | 156.14% | |
64 Neutral | $12.67B | 9.74 | 7.58% | 17015.08% | 12.21% | -6.96% | |
64 Neutral | $5.53B | 4.60 | 16.91% | 5.56% | 8.31% | -2.30% | |
59 Neutral | $3.68B | 12.97 | 12.47% | 1.72% | -0.43% | -16.22% | |
49 Neutral | $3.49B | 7.27 | 13.00% | ― | 14.74% | ― |
* Financial Sector Average
Performance Comparison
BHF
Brighthouse Financial
60.79
18.04
42.20%
CNO
CNO Financial
38.18
10.65
38.69%
GNW
Genworth Financial
6.98
0.75
12.04%
LNC
Lincoln National
33.54
3.10
10.18%
JXN
Jackson Financial Incorporation
84.18
10.28
13.91%
FG
F&G Annuities & Life Inc
32.21
-7.37
-18.62%
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.