Is MetLife Inc (NYSE: MET) Undervalued Amid Mixed Earnings and Industry P/E Comparisons?

The question of whether MetLife Inc (NYSE: MET) is undervalued hinges on a nuanced interplay between its valuation metrics, earnings growth prospects, and the broader insurance industry's trajectory. While the company's current price-to-earnings (P/E) ratio appears elevated relative to its historical averages, it remains below the 10-year benchmark and is supported by robust earnings growth forecasts. However, the insurance sector's mixed outlook-marked by slowing premium growth and geopolitical headwinds-introduces complexity to the valuation analysis.

Valuation Dislocation: A Premium or a Discount?

As of November 2025, MetLife trades at a trailing P/E ratio of 14.29 to 15.02, depending on the source. This range is notably higher than the insurance industry's average P/E of 13.2x to 13.47x according to industry data, suggesting investors are paying a 8% to 12% premium for MetLife's shares compared to peers. Yet, this premium appears modest when contextualized against MetLife's historical valuation. The stock's P/E is 31% below its 10-year average of 20.43 per financial analysis and 16% below its 5-year average of 15.9 as reported by Wall Street analysts. These figures imply that, despite the current premium, MetLife is trading at a discount relative to its long-term valuation norms-a potential sign of undervaluation.

Further complicating the picture is the discrepancy between MetLife's P/E and industry averages. Some sources report MetLife's P/E at 13.27x, below the sector's 14.18x, while others highlight a 14.29x P/E against an industry average of 13.2x. This inconsistency may stem from varying methodologies or timing of data collection. Regardless, the consensus is that MetLife's valuation is neither extreme overvaluation nor undervaluation but sits in a gray area, warranting closer scrutiny of its fundamentals.

Earnings Growth: A Bright Spot Amid Sector Headwinds

Analysts project MetLife's earnings per share to grow at a compound annual growth rate of 19.5% from 2025 to 2027, reaching $11.22 by 2027. This outpaces the insurance sector's average forecast of 6.6% according to market research, a stark contrast to the industry's broader challenges. For instance, global insurance premium growth is expected to decelerate to 2% in 2025, with non-life and life insurance premiums growing at 2.6% and 1%, respectively. U.S. tariffs and geopolitical fragmentation are cited as key drags on sector-wide performance.

MetLife's outperformance is driven by strong performance in its Asia, Group Benefits, and EMEA segments, bolstered by higher volumes and improved investment income. The company's Return on Equity (ROE) of 13.77% as of November 2025 per financial analysis-a 51% increase from its 10-year average-further underscores its operational efficiency. While this ROE lags behind Globe Life's 21.07% according to comparative data, it outperforms peers like Unum Group and Equitable Holdings, making it a standout in a sector grappling with flat earnings momentum as reported by financial analysis.

Industry Comparisons and Long-Term Return Potential

The insurance sector's mixed outlook raises questions about MetLife's long-term shareholder return potential. While global multiline insurers are expected to see flat or low single-digit earnings growth in 2025–2026 according to financial reports, the U.S. general insurance market is projected to grow at 8.5% CAGR through 2027 as reported by market analysis. MetLife's exposure to this resilient segment, combined with its strong EPS growth forecasts, positions it to outperform peers. Analysts' price targets for MetLife-ranging from $91.00 to $103.00, with an average of $95.00 according to stock forecasts-suggest a 19% to 30% upside from current levels, implying confidence in its ability to capitalize on favorable trends.

However, risks persist. Rising interest rates, which have historically benefited insurers through higher investment yields, may stabilize or reverse, impacting MetLife's margins. Additionally, regulatory shifts and economic volatility could disrupt premium growth, particularly in non-life insurance. Investors must weigh these risks against MetLife's strong operational performance and favorable analyst expectations.

Conclusion: A Case for Cautious Optimism

MetLife's valuation appears to reflect a balance between its historical underperformance and future growth potential. While its current P/E ratio is modestly above the industry average, it is significantly below its own long-term averages, suggesting a potential discount. Coupled with robust EPS growth projections and a strong ROE, this creates a compelling case for undervaluation. However, the insurance sector's broader challenges-slowing premium growth and geopolitical uncertainties-necessitate caution. For investors with a medium-term horizon, MetLife offers an attractive risk-reward profile, provided they monitor macroeconomic and regulatory developments that could reshape the sector's dynamics.