BHF Stock Trading at a Discount to Industry at 0.51X: Time to Buy?

Shares of  Brighthouse Financial, Inc. BHF are trading at a discount compared to the Zacks  Life Insurance industry. Its price-to-book value of 0.51X is lower than the industry average of 1.91X, the Finance sector’s 4.28X and the Zacks S&P 500 Composite’s 8.43X.

The insurer has a market capitalization of $2.72 billion. The average volume of shares traded in the last three months was 0.8 million.

Shares of other insurers, such asSun Life Financial SLF, Baldwin Insurance Group, Inc. BWIN andAIA Group Ltd AAGIY, are trading at a multiple higher than the industry average.

Price Performance of BHF

Shares of  Brighthouse Financialhave lost 1.5% year to date, underperforming its industry,the Finance sector,  and the Zacks S&P 500 Composite. Due to increasing expenses weighing on margin expansion and a high debt level, which leads to elevated leverage and lower interest coverage, Brighthouse Financial remains under pressure.

Projections For BHF

The Zacks Consensus Estimate for 2025 revenues is pegged at $8.8 billion, implying a year-over-year improvement of 1.1%. The consensus estimate for Brighthouse Financial’s current-year earnings is pegged at $18.44 per share, down 6.3% from the year-ago reported figure.

The consensus estimate for 2026 earnings per share and revenues indicates an increase of 18.3% and 2.6%, respectively, from the corresponding 2025 estimates. 

Average Target Price for BHF Suggests Upside

Based on short-term price targets offered by 10 analysts, the Zacks average price target is $59.60 per share. The average suggests a potential 21.3% upside from the last closing price.

Mixed Analyst Sentiment on BHF

The Zacks Consensus Estimate for 2025 earnings has moved down 0.2% in the past seven days, while the same for 2026 has moved up 0.5% in the same time frame.

Brighthouse Financial’s Return on Capital

BHF’s trailing 12-month return on equity is 25.6%, ahead of the industry average of 15.37%. Return on equity, a profitability measure, reflects how effectively a company is utilizing its shareholders ' equity.

Key Points to Note for BHF

Brighthouse Financial is poised to capitalize on the expanding individual insurance market, driven by its broad portfolio of life and annuity products and solid market positioning. With a strategic focus on increasing life insurance sales, enhancing annuity solutions, and expanding its distribution reach, the company is working to solidify its status as a leading force in the industry.

Brighthouse Financial continues to shift its business mix toward less capital-intensive offerings, aiming to build a more sustainable and diversified earnings profile. Its institutional spread margin business is expected to contribute meaningfully over time, while products like Brighthouse Shield Level Pay Plus are designed to address evolving needs in retirement planning.

Brighthouse Financial’s net investment income has shown consistent improvement in recent quarters. In first-quarter 2025, adjusted net investment income rose 2% year over year to $1.3 billion, supported by asset growth. The yield on adjusted net investment income has also trended upward, reaching 4.25% in the first quarter. Backed by a well-diversified, high-quality portfolio and a prudent investment approach, this metric is expected to strengthen further going forward.

Headwinds for BHF

Brighthouse Financial continues to face significant financial pressures despite its strong business fundamentals. Total expenses nearly quadrupled to $2.7 billion in the first quarter of 2025, with corporate expenses climbing 15.4% year over year to $239 million. This surge in costs, largely due to increased policyholder benefits and claims, resulted in a negative net margin of 11%, indicating a strain on profitability.

On the balance sheet side, the company’s long-term debt totaled $3.2 billion, resulting in a high debt-to-equity ratio of 59.5%, significantly above the industry average of 16.8%. Additionally, its return on invested capital was just 0.6%, slightly trailing the industry average of 0.7%, indicating inefficiencies in capital utilization that could impact future returns.

Conclusion

While Brighthouse Financial boasts a strong product portfolio and growing investment income, ongoing pressure from rising expenses, high leverage, and modest returns on capital tempers the outlook. Given the balanced mix of strengths and headwinds, it is therefore wise to adopt a wait-and-see approach on this Zacks Rank #3 (Hold) stock. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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