On Wednesday, Truist Securities adjusted its price target for shares of Unum Group (NYSE:UNM), increasing it to $70.00 from the previous $62.00, while maintaining a Buy rating for the insurance provider. The firm's decision comes in response to Unum Group's strong second-quarter performance and the anticipation of continued favorable benefit ratios.
The firm has also revised its earnings per share (EPS) estimates for Unum Group, citing the company's recent financial results and future prospects. For the year 2024, the EPS estimate has been increased to $8.50, up from $8.30. Looking further ahead, the 2025 EPS projection has been raised to $9.10 from $9.00. These adjustments reflect the analyst's confidence in the company's ability to maintain its positive trajectory.
Truist Securities highlighted the attractive valuation of Unum Group, noting that the stock is trading at approximately 0.8 times its book value excluding Accumulated Other Comprehensive Income (AOCI) or 6.8 times its projected 2024 earnings. The new price target of $70 is based on a 7.7 times multiple of the firm's 2025 EPS estimate, which is still below the median for the group.
The analyst from Truist Securities underscored the striking valuation and the rationale behind the updated price target, stating, "The valuation appears striking at 0.8x book value (ex-AOCI) or 6.8x 2024 earnings; our target of $70 (from $62) assumes a multiple of 7.7x our 2025 EPS estimate, still a point below the group median."
Unum Group has displayed strong performance in its first quarter of 2024, with a significant 13.6% increase in earnings per share and a 6.6% rise in core operations premium growth. The insurance company has also revealed plans to enhance shareholder value by raising its dividend by 15% and doubling its share repurchase program to $500 million annually. Additionally, the company's board of directors has approved a new share repurchase program, authorizing Unum to buy back up to $1 billion of its common stock starting August 1, 2024.
In analyst news, Evercore ISI has raised its price target on Unum Group shares to $59.00 from $58.00, maintaining its "In Line" rating. The firm's revised outlook comes after the company's recent earnings report, which prompted Evercore ISI to slightly increase its forward earnings estimates. Meanwhile, Piper Sandler has initiated coverage on Unum Group with an Overweight rating, citing the company's focus on underwriting and its potential for robust growth.
InvestingPro Insights
Following the positive revisions by Truist Securities, Unum Group (NYSE:UNM) also presents an intriguing profile according to InvestingPro data. With a solid market capitalization of $10.99 billion and an attractive P/E ratio of 8.45, which adjusts slightly to 8.27 for the last twelve months as of Q1 2024, the company stands out in the financial sector. The price to book ratio, at 1.07 for the same period, further underscores Unum Group's compelling valuation metrics.
InvestingPro Tips highlight Unum Group's robust dividend history, with a notable increase for 15 consecutive years and consistent payments over 38 years, indicating a strong commitment to shareholder returns. Furthermore, the company's liquid assets surpassing short-term obligations suggest a healthy liquidity position, which is reassuring for investors concerned about financial stability. With these financial strengths, Unum Group is trading near its 52-week high, reflecting investor confidence in its market position.
For those seeking more in-depth analysis, additional InvestingPro Tips are available, providing a comprehensive look at Unum Group's financial health and market potential. Visit https://www.investing.com/pro/UNM for a total of seven exclusive InvestingPro Tips that can guide investment decisions regarding Unum Group.
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