Life Insurers are Limping in to Their Earnings Reports, and the Fundamentals Aren’t Good
Life insurance companies mainly sell policies that pay a death benefit as a lump sum upon the death of the insured. Policies may be sold as term life which guarantees payment of a stated death benefit, but expires at the end of a specified term. They can also be sold as permanent or whole life policies. These policies are more expensive, but lasts a lifetime and carry a cash accumulation component. Life insurance firms may also sell long-term disability policies that help to replace the insured’s income if they become sick or disabled.
Over the last week the life insurance group has been one of the worst performing groups in terms of stock returns. We see on Tickeron’s Group Trends Screener that it’s within the worst seven performers with a loss of 3.19%. This probably isn’t what investors want to see with a number of members of the group getting ready to report earnings next week.
Prudential Financial (PRU) will report earnings on August 4. Manulife Financial (MFC) and Metlife (MET) will both report on August 5. Looking at a comparison of these three companies and their fundamental indicators, there isn’t much to be excited about.
All three companies get positive ratings for being undervalued, but the only other positive rating for any of them is a the outlook rating for Prudential. All of the other ratings are either neutral or negative. There are seven different categories and that gives us a total of 21 indicators. Out of 21 indicators, only four are positive. That’s not a very good percentage.
Personally I find it very concerning that all three stocks get the worst possible scores on the Profit Vs. Risk rating and the SMR rating. That is a major red flag for me when it comes to the long-term prospects for the stocks. Tickeron has a negative outlook on this group and predicts a further decline by more than 4.00% within the next month with a likelihood of 65%.
The technical analysis looks considerably better. You should keep in mind though that technical analysis tends to be more useful over the short-term. Tickeron’s technical analysis screener shows Metlife with five positive ratings and only one negative rating.
Prudential has four positive ratings and only two negative ratings. Manulife has only one positive rating and one negative rating.
The earnings estimates and the sentiment indicators for the three companies are very different in some areas and very similar in other areas. Metlife and Prudential have seen their consensus estimate get cut rather drastically over the last 90 days. For Metlife the EPS estimate was at $1.32 three months ago and is now at $0.90. Prudential’s EPS estimate was $2.65 and it’s now $1.71. Those are cuts of 31.8% and 35.5% respectively. We see that both of the companies are expected to earn considerably less than they did in the same period of 2019.
Manulife’s numbers are very different. We see that EPS estimate has been bumped up slightly, from $0.47 to $0.50, and the company is expected to earn more than it did last year.
As for the sentiment indicators, analysts have similar ratings on Metlife and Manulife with both buy percentages at 64%. Analysts are considerably more bearish on Prudential with a buy percentage of only 20%. Short sellers share a similar opinion with the short interest ratios for Metlife and Manulife in the same range while Prudential’s is higher.
The Tickeron Scorecard for these three stocks shows Metlife and Prudential each have “buy” ratings while Manulife has a “sell” rating. Those ratings are based primarily on the short-term outlook and the technical indicators. From a longer term perspective, I feel Manulife has the better outlook.
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Momentum Indicator for PRU turns negative, indicating new downward trend
PRU saw its Momentum Indicator move below the 0 level on September 28, 2026. This is an indication that the stock could be shifting in to a new downward move. Traders may want to consider selling the stock or exploring put options. Tickeron's A.I.dvisor looked at 94 similar instances where the indicator turned negative. In 54 of the 94 cases, the stock moved further down in the following days. The odds of a decline are at 57%.
Technical Analysis (Indicators)
Bearish Trend Analysis
PRU moved below its 50-day moving average on September 16, 2026 date and that indicates a change from an upward trend to a downward trend.
The 10-day moving average for PRU crossed bearishly below the 50-day moving average on September 18, 2026. This indicates that the trend has shifted lower and could be considered a sell signal. In 4 of 15 past instances when the 10-day crossed below the 50-day, the stock continued to move higher over the following month. The odds of a continued downward trend are 27%.
Following a 3-day decline, the stock is projected to fall further. Considering past instances where PRU declined for three days, the price rose further in 50 of 62 cases within the following month. The odds of a continued downward trend are 55%.
The Aroon Indicator for PRU entered a downward trend on October 05, 2026. This could indicate a strong downward move is ahead for the stock. Traders may want to consider selling the stock or buying put options.
Bullish Trend Analysis
The RSI Indicator points to a transition from a downward trend to an upward trend -- in cases where PRU's RSI Oscillator exited the oversold zone, 17 of 22 resulted in an increase in price. Tickeron's analysis proposes that the odds of a continued upward trend are 77%.
The Stochastic Oscillator shows that the ticker has stayed in the oversold zone for 3 days. The price of this ticker is presumed to bounce back soon, since the longer the ticker stays in the oversold zone, the more promptly an upward trend is expected.
Following a +1.58% 3-day Advance, the price is estimated to grow further. Considering data from situations where PRU advanced for three days, in 212 of 350 cases, the price rose further within the following month. The odds of a continued upward trend are 61%.
PRU may jump back above the lower band and head toward the middle band. Traders may consider buying the stock or exploring call options.
Fundamental Analysis (Ratings)
The Tickeron Valuation Rating of 12 (best 1 - 100 worst) indicates that the company is seriously undervalued in the industry. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization. This rating is based on the following metrics, as compared to industry averages: P/B Ratio (1.268) is normal, around the industry mean (1.355). P/E Ratio (10.525) is within average values for comparable stocks, (20.332). Projected Growth (PEG Ratio) (0.674) is also within normal values, averaging (0.463). Dividend Yield (0.048) settles around the average of (0.037) among similar stocks. P/S Ratio (0.632) is also within normal values, averaging (1.303).
The Tickeron Price Growth Rating for this company is 47 (best 1 - 100 worst), indicating steady price growth. PRU’s price grows at a higher rate over the last 12 months as compared to S&P 500 index constituents.
The Tickeron Profit vs. Risk Rating rating for this company is 48 (best 1 - 100 worst), indicating well-balanced risk and returns. The average Profit vs. Risk Rating rating for the industry is 61, placing this stock slightly better than average.
The Tickeron Seasonality Score of 75 (best 1 - 100 worst) indicates that the company is slightly overvalued in the industry. The Tickeron Seasonality score describes the variance of predictable price changes around the same period every calendar year. These changes can be tied to a specific month, quarter, holiday or vacation period, as well as a meteorological or growing season.
The Tickeron PE Growth Rating for this company is 93 (best 1 - 100 worst), pointing to worse than average earnings growth. The PE Growth rating is based on a comparative analysis of stock PE ratio increase over the last 12 months compared against S&P 500 index constituents.
The Tickeron SMR rating for this company is 100 (best 1 - 100 worst), indicating weak sales and an unprofitable business model. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents. The weighted SMR value is a proprietary formula developed by Tickeron and represents an overall profitability measure for a stock.
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a financial conglomerate
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