Life Insurance Stock Gets Boost from $1.68 Billion Acquisition

The equity is down over 24% this year

Digital Content Manager
Sep 17, 2020 at 1:00 PM
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The shares of Metlife Inc (NYSE: MET) are up 1.8% at $38.31 at last check, after the life insurance giant agreed to acquire vision-care benefits company Versant Health, the owner of well-established brands Davis Vision and Superior Vision, for $1.68 billion in an all-cash transaction.The deal is expected to close in the fourth quarter of 2020, officials said in a statement.

The security has been trading sideways for the past couple of months, after a volatile period following its mid-March, eight-year lows. Though shares attempted a rally to the $43 mark in June, the stock ultimately slipped under the 100-day moving average shortly afterwards. More recently, shares have been struggling with overhead pressure at the $40 level, and are now testing support at the previously resistant moving average, which has since emerged as a floor. Year-to-date, the security is struggling with a 24.8% deficit.


Analysts are mostly optimistic towards the security, with five of the eight in coverage sporting a "buy" or better rating, and the remaining three carrying a tepid "hold." On the flip side, the 12-month consensus target price of $45.45 is a hefty 18.4% premium to current levels, meaning price-target cuts could very well be on the horizon for MET.

Meanwhile, the options pits are leaning more bullish. In the last 50 days, 9,450 calls have been exchanged, compared to 3,482 puts. This still rings true today. At last check, 4,442 calls have crossed the tape, which is double the average intraday amount, and  more than double the number of puts traded. Most popular is the monthly September 40 call, followed by the weekly 10/30 38.50-strike call, with new positions being opened at the latter.


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