Goldman Sachs Group, Inc. (The) Begins Coverage on Unum Group (UNM)
Analysts at Goldman Sachs Group, Inc. (The) initiated coverage on shares of Unum Group (NYSE:UNM) in a research report issued on Wednesday. The firm set a “sell” rating and a $48.00 price target on the financial services provider’s stock. Goldman Sachs Group, Inc. (The)’s price objective would suggest a potential downside of 8.03% from the company’s current price.
The analysts wrote, “We believe that MET should also see value uplift as the market better appreciates the stability in the remaining business following the last 12 months that were highlighted by balance sheet and earnings volatility related to the company’s US retail separation,” the firm said.See also: Jim Cramer Advises His Viewers On Metlife, Brighthouse Financial And B&G Foods Athene Holding: Best Positioned To Deploy CapitalGoldman believes Athene Holdings is best positioned to deploy capital, which could fuel growth in a variety of interest rate scenarios. The firm sees the company to be its top pick among the higher-beta names, as excess capital and debt could help earnings per share growth.The firm believes out of the $3.5 billion of combined debt and equity capacity, $750 million to $1.25 billion could be put to work in the near term. This, according to the firm, could lead to 7–13 percent earnings per share accretion, posing upside risk to its estimates, which assume deployment only through organic means.Lincoln PressuredThe firm sees earnings and capital pressure for Lincoln from universal life insurance. While noting that the company has maintained its earnings power in its life insurance business through the cost of insurance increases and reinsurance captures, the firm said it expects a slowdown in the cost of insurance increases following impending litigation and regulatory scrutiny from the New York Department of Financial Services.The firm said this could hurt earnings from the life insurance business. Additionally, the firm said it would pose some risk heading into the third quarter actuarial review as well as the goodwill review in the fourth quarter.Unum: Valuation Downside SeenGoldman sees downside to Unum’s valuation, as it believes the closed block has negative value. Additionally, the firm said getting capital back out of the LTC business is less likely.”Our roughly $800m negative value on the LTC business is reflective of the assumption that the cash drag continues for about 10 years, which we did not feel was overly punitive given the more than 20-year duration of the product,”
A number of other research firms have also recently issued reports on UNM. Morgan Stanley raised their price target on shares of Unum Group from $52.00 to $55.00 and gave the stock an “equal weight” rating in a report on Thursday, October 5th. Zacks Investment Research raised shares of Unum Group from a “hold” rating to a “buy” rating and set a $53.00 price target for the company in a report on Wednesday, September 6th. BidaskClub cut shares of Unum Group from a “buy” rating to a “hold” rating in a report on Wednesday, July 19th. ValuEngine raised shares of Unum Group from a “buy” rating to a “strong-buy” rating in a report on Friday, September 1st. Finally, Wells Fargo & Company reissued a “hold” rating on shares of Unum Group in a report on Sunday, July 30th. Two research analysts have rated the stock with a sell rating, six have issued a hold rating, four have assigned a buy rating and one has issued a strong buy rating to the company’s stock. Unum Group currently has an average rating of “Hold” and an average price target of $51.00.
Shares of Unum Group (NYSE:UNM) opened at 52.19 on Wednesday. The firm’s 50-day moving average is $50.14 and its 200-day moving average is $47.83. Unum Group has a 52 week low of $34.83 and a 52 week high of $52.75. The stock has a market capitalization of $11.78 billion, a price-to-earnings ratio of 12.57 and a beta of 1.59.
Unum Group (NYSE:UNM) last posted its quarterly earnings results on Thursday, July 27th. The financial services provider reported $1.05 earnings per share (EPS) for the quarter, topping the Zacks’ consensus estimate of $1.01 by $0.04. The business had revenue of $2.81 billion during the quarter, compared to analysts’ expectations of $2.80 billion. Unum Group had a net margin of 8.57% and a return on equity of 10.23%. During the same quarter last year, the company posted $1.00 earnings per share. Analysts forecast that Unum Group will post $4.17 earnings per share for the current fiscal year.
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In other Unum Group news, Director Gloria C. Larson sold 2,460 shares of Unum Group stock in a transaction on Tuesday, August 1st. The shares were sold at an average price of $50.23, for a total value of $123,565.80. The transaction was disclosed in a legal filing with the Securities & Exchange Commission, which is available at this hyperlink. Also, Director Pamela H. Godwin sold 2,500 shares of Unum Group stock in a transaction on Monday, August 7th. The shares were sold at an average price of $50.71, for a total transaction of $126,775.00. The disclosure for this sale can be found here. Company insiders own 0.53% of the company’s stock.
A number of institutional investors and hedge funds have recently added to or reduced their stakes in the business. Vanguard Group Inc. increased its holdings in Unum Group by 1.4% in the second quarter. Vanguard Group Inc. now owns 24,407,058 shares of the financial services provider’s stock valued at $1,138,102,000 after buying an additional 337,531 shares in the last quarter. BlackRock Inc. increased its holdings in Unum Group by 2,690.7% in the first quarter. BlackRock Inc. now owns 16,788,648 shares of the financial services provider’s stock valued at $787,221,000 after buying an additional 16,187,062 shares in the last quarter. State Street Corp increased its holdings in Unum Group by 5.0% in the first quarter. State Street Corp now owns 12,119,332 shares of the financial services provider’s stock valued at $568,278,000 after buying an additional 573,818 shares in the last quarter. JPMorgan Chase & Co. increased its holdings in Unum Group by 6.3% in the second quarter. JPMorgan Chase & Co. now owns 7,036,701 shares of the financial services provider’s stock valued at $328,121,000 after buying an additional 415,909 shares in the last quarter. Finally, AQR Capital Management LLC increased its holdings in Unum Group by 32.4% in the first quarter. AQR Capital Management LLC now owns 5,699,745 shares of the financial services provider’s stock valued at $267,262,000 after buying an additional 1,395,330 shares in the last quarter. 92.20% of the stock is owned by institutional investors.
About Unum Group
Unum Group is a provider of financial protection benefits in the United States and the United Kingdom. The Company’s products include disability, life, accident, critical illness, dental and vision, and other related services. Its segments include Unum US, Unum UK, Colonial Life, Closed Block and Corporate.
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