Analyst Joshua Shanker of Bank of America Securities reiterated a Hold rating on Unum Group (UNM – Research Report), with a price target of $50.00.
Geoff Meacham has given his Hold rating due to a combination of factors impacting Unum Group’s recent performance and future expectations. Despite some positive trends, such as the strong margins continuing in the Unum US segment, there have been underwhelming results in other areas like Colonial and the Closed Book. These latter performances were affected by one-time reserve charges and adjustments related to reinsurance transactions. While the US group’s earnings in disability and life insurance were better than projected, the setbacks in other divisions have led to a modest earnings per share (EPS) miss for the fourth quarter of 2023.
Furthermore, the forward-looking earnings projections for Unum Group are modestly positive, suggesting steady but not exceptional growth. Shanker’s revised price objective reflects a slight increase, based on a combination of higher forecasted earnings and a modest expansion of the earnings multiple. The new price objective offers only a modest upside potential, which underpins the rationale for maintaining a neutral stance. This cautious optimism about the company’s ongoing business power, despite elevated claims incidence, contributes to the Hold rating, indicating that while the company is not underperforming, the potential for significant stock appreciation in the near term may be limited.
In another report released on January 23, Evercore ISI also maintained a Hold rating on the stock with a $54.00 price target.
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Based on the recent corporate insider activity of 62 insiders, corporate insider sentiment is negative on the stock. This means that over the past quarter there has been an increase of insiders selling their shares of UNM in relation to earlier this year.
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Unum Group (UNM) Company Description:
Unum Group is engaged in providing financial protection benefits. It operates through the following segments: Unum U.S., Unum UK, Colonial Life, Closed Block and Corporate. The Unum U.S. segment comprises of group long-term and short-term disability insurance, group life and accidental death and dismemberment products, and supplemental and voluntary lines of business. The Unum UK segment offers insurance for group long-term disability, group life, and supplemental lines of business which include dental, individual disability, and critical illness products. The Colonial Life segment includes insurance for accident, sickness, disability products, life products, and cancer and critical illness products. The Closed Block segment consists of individual disability, group and individual long-term care, and other insurance products no longer actively marketed. The Corporate segment refers to investment income on corporate assets and other corporate income and expenses not allocated to a line of business; and interest expense on corporate debt other than non-recourse debt. The company was founded in 1848 and is headquartered in Chattanooga, TN.
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