Is Brighthouse Financial (BHF) Still a Buy After a Strong Rally and Takeover Rumors?

In recent months, Brighthouse Financial (BHF) has captured the attention of investors and analysts alike, driven by a sharp stock price rally and speculation surrounding a potential takeover. As of November 2025, the stock has surged nearly 39% over three months, hitting a 52-week high of $65.53, while rumors of a $70-per-share acquisition by Aquarian Capital-a 37% premium over its closing price-have further stoked market enthusiasm. However, with valuation metrics and analyst sentiment presenting a mixed picture, the question remains: Is BHF still a compelling buy, or has the rally priced in too much optimism?

Valuation Analysis: Attractive Metrics or Overextended?

BHF's valuation appears compelling at first glance. The stock trades at a trailing price-to-earnings (P/E) ratio of 4.43 and a forward P/E of 3.14 according to stock analysis, significantly below industry averages for life insurers. Its price-to-book (P/B) ratio of 0.59 according to stock analysis also suggests undervaluation relative to tangible assets, while the price-to-sales (P/S) ratio of 0.48 according to stock analysis underscores its low cost relative to revenue. These metrics align with a narrative of bargain hunting, particularly given the company's earnings rebound-from a loss of $18.39 per share in 2023 to $4.67 in 2024.

However, the recent rally has pushed the stock closer to its intrinsic value estimates. A fair value calculation of $60.89 according to financial analysis implies the stock may already be overvalued, while the acquisition offer at $70-a 13% premium to the current price-has inflated expectations. If the deal materializes, shareholders could realize immediate gains, but the stock's post-announcement performance suggests much of this potential has already been priced in. For instance, the 13.37% weekly gain in late November according to market data reflects aggressive positioning by investors anticipating the deal's success.

Market Sentiment: Optimism vs. Caution

Market sentiment toward BHF is divided. On one hand, the stock's 29.9% total shareholder return over the past year according to financial data and its 1.39% annualized gain according to market data highlight strong investor confidence. Acquisition rumors and improved earnings have acted as tailwinds, with the June 2025 quarterly EPS of $1.03 according to earnings data reinforcing the company's operational turnaround.

On the other hand, analyst recommendations lean toward caution. A consensus "Reduce" rating from ten brokerages includes two sell ratings, seven holds, and one buy, with an average 12-month target price of $63.70. This suggests skepticism about sustaining current momentum, particularly if the Aquarian Capital deal faces regulatory hurdles or falls through. Additionally, while BHF's P/E ratio remains attractive, its enterprise value-to-EBITDA ratio is unavailable according to stock analysis, raising questions about the durability of its cash flow generation.

Risks and Considerations

The primary risk for BHF lies in the uncertainty surrounding the acquisition. While the $70-per-share offer represents a compelling floor for value, regulatory approvals, financing conditions, or shifts in market dynamics could derail the deal. Investors must also weigh the likelihood of the company maintaining its earnings trajectory without the acquisition's catalytic effect.

Moreover, the stock's valuation appears to hinge on short-term catalysts rather than long-term fundamentals. For example, the forward P/E of 3.14 according to stock analysis assumes robust future earnings growth, which may be challenging to achieve in a competitive insurance sector. If earnings fail to meet expectations, the stock could face downward pressure despite its current low valuation.

Conclusion: A Buy for the Bold, a Hold for the Prudent

Brighthouse Financial's valuation metrics remain attractive, particularly for investors who believe in its long-term fundamentals or the likelihood of the Aquarian Capital deal closing. The stock's low P/E and P/B ratios, combined with its earnings rebound, justify a bullish case. However, the mixed analyst sentiment, overvaluation warnings, and reliance on speculative catalysts argue for a more cautious approach.

For risk-tolerant investors, BHF could still offer upside if the acquisition is finalized or if the company continues to outperform earnings expectations. For others, the stock's current price near $65.53 may represent a less compelling entry point, especially given the elevated expectations already priced into the shares. Ultimately, while BHF's fundamentals are solid, the market's aggressive pricing of the acquisition premium introduces a layer of uncertainty that warrants careful consideration.