MetLife, Inc.METNYSE

Overview Intelligence Charts News Fundamentals Key Metrics TTM Financials Earnings Growth Rating Analysts Institutional Peers Historical

DCF Valuation

DCF Valuation Summary

Strong Buy

Fair Value: $360.71 per share(market-calibrated)

+397.3%

Upside to Fair Value

Current

$72.54

Pure Model

$385.86

Fair Value

$360.71

Bull Case

$472.57

Bear Case

$313.66

Market Reality Check

Model Terminal Growth

2.50%

Market-Implied Growth

0.50%

Calibrated Growth

1.80%

Fair value uses 65% model / 35% market-implied terminal growth. Pure model: $385.86.

What's Driving This Ratingfor MET

✓

CapEx already efficient

CapEx at 0.00% of revenue is already at or below sector maintenance level. No normalization needed — cash conversion is already strong.

↑

Margin expansion modeled

Current EBIT margin is 9.46% — below the sector mature average of 28.00%. Model expands margins as the business scales and operating leverage kicks in. Year 10 EBIT reaches $24.8B (23.14% margin).

→

Moderate revenue growth

Analyst consensus projects 2.56% revenue growth, fading to 2.50% by Year 10. Revenue reaches $107.0B (vs $77.1B today).

🎯

Market pricing in lower growth than model

The market implies only 0.50% perpetual growth — 200bps below the model's 2.50%. This suggests the market sees headwinds or risks not in the model.

✓

Strong cash flow conversion

Year 10 FCF/EBITDA conversion of 69.85% indicates efficient cash generation. FCF reaches $17.3B by Year 10 (16.16% FCF margin).

Weighted Average Cost of Capital (WACC)

Cost of Equity (CAPM)

Risk-Free Rate (Rf)4.50%

Beta (β)0.74

Market Risk Premium4.50%

*Using current implied premium (4.5% per Damodaran 2026), not historical (6.5%)

Cost of Equity (Re)7.82%

Cost of Debt

Pre-tax Cost of Debt5.17%

Tax Rate26.99%

After-tax Cost of Debt3.78%

Equity Weight (E/V)71.39%

Debt Weight (D/V)28.61%

WACC Calculation

WACC = (E/V × Re) + (D/V × Rd × (1-Tc))

WACC = (71.39% × 7.82%) + (28.61% × 3.78%)

= 6.66%

10-Year Free Cash Flow Projections(showing years 1, 3, 5, 7, 10)

Year	Year 1	Year 3	Year 5	Year 7	Year 10
Revenue	$79.1B	$87.6B	$94.6B	$99.4B	$107.0B
EBIT	$7.5B	$8.3B	$12.5B	$18.4B	$24.8B
Tax	$2.0B	$2.2B	$3.4B	$5.0B	$6.7B
NOPAT	$5.5B	$6.1B	$9.1B	$13.4B	$18.1B
+ Depreciation	--	--	--	--	--
- Capex	--	--	--	--	--
- Δ NWC	$592M	$1.5B	$692M	$727M	$783M
Free Cash Flow	$4.9B	$4.6B	$8.4B	$12.7B	$17.3B
Discount Factor	0.938	0.824	0.724	0.637	0.525
Present Value	$4.6B	$3.8B	$6.1B	$8.1B	$9.1B

FCF Formula: Free Cash Flow = NOPAT + Depreciation - Capex - Change in Net Working Capital

Terminal Value Calculation

Perpetuity Growth Method

Year 10 FCF$17.3B

Terminal Growth Rate2.50%

WACC6.66%

TV = FCF₁₀ × (1+g) / (WACC-g)

Terminal Value$425.7B

PV of Terminal Value$223.3B

Exit Multiple Method

Year 10 EBITDA$24.8B

Exit Multiple (EV/EBITDA)12.0x

TV = EBITDA₁₀ × Exit Multiple

Terminal Value$297.1B

PV of Terminal Value$155.9B

Valuation Summary

Perpetuity Growth Method

PV of Projected FCFs$64.3B

PV of Terminal Value$223.3B

Enterprise Value$287.6B

(-) Net Debt-$2.7B

Equity Value$290.3B

Shares Outstanding665M

Price per Share$436.57

Exit Multiple Method

PV of Projected FCFs$64.3B

PV of Terminal Value$155.9B

Enterprise Value$220.2B

(-) Net Debt-$2.7B

Equity Value$222.9B

Shares Outstanding665M

Price per Share$335.15

Pure Model Fair Value

$385.86

Average of perpetuity growth and exit multiple methods (before market calibration)

Sensitivity AnalysisPrice per Share

WACC ↓ / Growth →	1.50%	2.00%	2.50%	3.00%	3.50%
4.66%	$519.33	$570.50	$645.31	$659.35	$632.57
5.66%	$418.24	$444.19	$478.34	$525.31	$593.98
6.66%	$352.02	$367.13	$385.86	$409.70	$441.08
7.66%	$304.27	$313.85	$325.29	$339.17	$356.39
8.66%	$267.66	$274.10	$281.60	$290.41	$300.93

How to read: This table shows how the valuation changes with different WACC (discount rate) and terminal growth rate assumptions. Green = undervalued, Red = overvalued.

Scenario Analysis

Bear Case

$313.66

332.4% vs current

• -25% vs analyst consensus
• Terminal growth: 2.0%
• Beta: 0.92

Base Case

$385.86

432.0% vs current

• Analyst consensus
• Terminal growth: 2.5%
• Beta: 0.74

Bull Case

$472.57

551.5% vs current

• +25% vs analyst consensus
• Terminal growth: 3.0%
• Beta: 0.63

Key Assumptions & Drivers• Financial Services Sector

Growth Assumptions (Select Years)

Year 1 Revenue Growth2.56%

Year 3 Revenue Growth6.06%

Year 5 Revenue Growth2.50%

Year 7 Revenue Growth2.50%

Year 10 Revenue Growth2.50%

Terminal Growth Rate2.50%

Margin & Efficiency

Current EBIT Margin9.46%

Terminal EBIT Margin28.00%

Tax Rate26.99%

Historical Capex / Rev0.00%

NWC / Revenue30.00%

Key Drivers: Revenue growth, operating margin expansion, capex efficiency, and working capital management are the primary drivers of cash flow generation. Terminal value assumptions significantly impact final valuation.

Institutional-Grade Methodology

Actual Company Data: Revenue, EBIT, Capex, NWC, Tax Rate, Interest Expense, Beta

Market Assumptions: Risk-free: 4.5% (10Y), MRP: 4.5% (Damodaran 2026), Exit: 12x EV/EBITDA (Financial Services sector)

This DCF model is for informational purposes only. Projections are based on assumptions that may not materialize. Past performance does not guarantee future results. Consult a financial advisor before making investment decisions.

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