Unum Group shares price target raised by Piper Sandler By Investing.com

Piper Sandler maintained its Overweight rating on Unum Group (NYSE:NYSE:) and raised the company’s price target to $66.00 from $64.00. The firm highlighted Unum’s strong position to benefit from favorable industry trends.

Unum Group, a player in the life insurance sector, is seen as well-equipped to handle potential rate cuts, with less than 20% of its revenue coming from net investment income (NII). This positions Unum primarily as an underwriter, differentiating it from its peers.

The firm also noted improvements in Unum’s long-term care (LTC) block, which has historically been a concern during actuarial review seasons. However, with recent enhancements, this is no longer perceived as a significant issue. Additionally, the company has experienced favorable claims utilization across its broader operations.

Piper Sandler pointed out that Unum’s improved earnings, effective capital deployment, and free cash flow (FCF) conversion are all supported by a higher base of premiums. The valuation of Unum’s shares also remains attractive, trading below the peer group average and approximately 0.5 times less than the 10-year average.

Furthermore, Piper Sandler & Co. is advising Unum Group on the sale of its Medical Stop Loss Business to Amynta Group, which is a separate ongoing transaction. The full report contains more detailed information on the firm’s outlook and the rationale behind the price target increase.

Unum Group reported record second-quarter earnings of $2.16 per share, marking a substantial 5.4% growth in core operations premium. As a result of these robust financial results, the company has raised its full-year earnings per share growth forecast from an initial 7-9% to an anticipated 10-15%. Barclays initiated coverage on Unum Group, assigning an Overweight rating to the insurance provider with a price target set at $73.00.

This rating reflects the firm’s positive outlook on Unum Group’s future financial performance, notably due to its strong profitability and improving cash flow situation. Unum Group has also announced a $1 billion share repurchase authorization, further demonstrating its commitment to shareholder returns and prudent capital management. In addition, Barclays highlighted Unum Group’s effective increase in reserves, providing a solid buffer against potential losses.

InvestingPro Insights

Unum Group’s strong market position, as highlighted by Piper Sandler, is further supported by recent InvestingPro data. The company’s P/E ratio of 8.53 suggests that it may be undervalued relative to its earnings, aligning with Piper Sandler’s view on the stock’s attractive valuation. This is particularly noteworthy given that Unum is trading near its 52-week high, with a price at 99.03% of its peak.

InvestingPro Tips reveal that Unum has raised its dividend for 15 consecutive years and maintained payments for 38 years, demonstrating a commitment to shareholder returns that complements its strong market position. The company’s dividend yield stands at 2.89%, with a significant dividend growth of 27.27% in the last twelve months.

The company’s financial health appears robust, with liquid assets exceeding short-term obligations. This strength is reflected in Unum’s impressive year-to-date price total return of 31.48%, outperforming many of its peers in the insurance sector.

For investors seeking a deeper understanding of Unum Group’s potential, InvestingPro offers additional tips and insights, with 8 more tips available on the platform.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.