Earnings Miss: Brighthouse Financial, Inc. Missed EPS And Analysts Are Revising Their Forecasts

As you might know, Brighthouse Financial, Inc. (NASDAQ:BHF) recently reported its first-quarter numbers. Things were not great overall, with a surprise (statutory) loss of US$7.72 per share on revenues of US$2.0b, even though the analysts had been expecting a profit. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

See our latest analysis for Brighthouse Financial

Taking into account the latest results, the current consensus from Brighthouse Financial's eight analysts is for revenues of US$8.10b in 2023, which would reflect a reasonable 4.8% increase on its sales over the past 12 months. Brighthouse Financial is also expected to turn profitable, with statutory earnings of US$12.30 per share. Before this earnings report, the analysts had been forecasting revenues of US$8.22b and earnings per share (EPS) of US$9.93 in 2023. There was no real change to the revenue estimates, but the analysts do seem more bullish on earnings, given the massive increase in earnings per share expectations following these results.

The consensus price target was unchanged at US$48.60, implying that the improved earnings outlook is not expected to have a long term impact on value creation for shareholders. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. Currently, the most bullish analyst values Brighthouse Financial at US$60.00 per share, while the most bearish prices it at US$42.00. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Brighthouse Financial shareholders.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. For example, we noticed that Brighthouse Financial's rate of growth is expected to accelerate meaningfully, with revenues forecast to exhibit 6.4% growth to the end of 2023 on an annualised basis. That is well above its historical decline of 0.6% a year over the past five years. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to grow 5.9% annually. So while Brighthouse Financial's revenues are expected to improve, it seems that it is expected to grow at about the same rate as the overall industry.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Brighthouse Financial's earnings potential next year. Happily, there were no real changes to sales forecasts, with the business still expected to grow in line with the overall industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple Brighthouse Financial analysts - going out to 2025, and you can see them free on our platform here.

You can also see whether Brighthouse Financial is carrying too much debt, and whether its balance sheet is healthy, for free on our platform here.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.