Goldman Sachs Fools Small Investors Again?

In its note to investors, Goldman said it expected Metlife Inc (NYSE:MET) to appreciate by 14% by the end of 2018. The insurance giant has been investing heavily in cost saving technology and Goldman analysts believed the investment would start to really pay off. On top of that, less volatile business conditions were expected to have a positive impact on profitability and Goldman estimated that Metlife would add 100 to 150 basis points to its ROE by 2020. Analysts also noted that increasing interest rates 10-year Treasury notes would provide a windfall for Metlife.

The year started well for Metlife Inc (NYSE:MET) as it registered a huge legal victory against US regulators that wanted to include the company in the “too big to fail” group, which would have implied much stricter regulation. On January 19, the Trump administration dropped the case. At the end of January, Metlife announced it was setting aside $575 million in order to “strengthen reserves”, a term Warren Buffett once called the “ugly twin of loss development.” This announcement came after the company said in December 2017 that it lost track of some of its annuity and pension clients that changed their jobs or relocated. Metlife Inc (NYSE:MET) plunged nearly 9% on January 30 and has since then failed to recover the lost ground. Shares have ended Tuesday’s trading session at $47.30 apiece and is down by 11% since Goldman issued its note to investors.