Strength Seen in Brighthouse Financial (BHF): Can Its 6.2% Jump Turn into More Strength?

Brighthouse Financial (BHF) shares soared 6.2% in the last trading session to close at $50.27. The move was backed by solid volume with far more shares changing hands than in a normal session. This compares to the stock's 18.5% loss over the past four weeks.

Brighthouse Financial is reportedly to be acquired. Per media reports an investment firm Aquarian Holdings is close to buying the life insurer. This news likely have fueled price appreciation for the stock.  Brighthouse is also revamping its life insurance business to boost annuity sales. The insurer remains focused on transitioning the business mix to less capital-intensive products.

Brighthouse Financial is poised to benefit from growth opportunities, given its expansive and compelling suite of life and annuity products and a strong market presence. It aims to become a premier player in the industry.

Given enhanced financial strength and flexibility, the company remains committed to returning capital to shareholders and intends to maintain an opportunistic share repurchase program to create significant value for the shareholders.

This annuity and life insurance company is expected to post quarterly earnings of $4.70 per share in its upcoming report, which represents a year-over-year change of -15.6%. Revenues are expected to be $2.2 billion, down 0.7% from the year-ago quarter.

Earnings and revenue growth expectations certainly give a good sense of the potential strength in a stock, but empirical research shows that trends in earnings estimate revisions are strongly correlated with near-term stock price movements.

For Brighthouse Financial, the consensus EPS estimate for the quarter has been revised 1.1% higher over the last 30 days to the current level. And a positive trend in earnings estimate revision usually translates into price appreciation. So, make sure to keep an eye on BHF going forward to see if this recent jump can turn into more strength down the road.

The stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

Brighthouse Financial is part of the Zacks Insurance - Life Insurance industry. Primerica (PRI), another stock in the same industry, closed the last trading session 1.2% higher at $263.57. PRI has returned 1.1% in the past month.

Primerica's consensus EPS estimate for the upcoming report has changed +0.4% over the past month to $5.18. Compared to the company's year-ago EPS, this represents a change of +10%. Primerica currently boasts a Zacks Rank of #3 (Hold).

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

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