Credit Suisse Starts Unum Group (UNM) at Neutral
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Credit Suisse initiates coverage on Unum Group (NYSE: UNM) with a Neutral rating and a price target of $42.00.
Analyst John Nadel commented, "While we like the company’s positive leverage to economic improvement, specifically in terms of employment levels and wage growth, in addition to a strong track record of capital return and potential tailwinds from higher interest rates, we currently view the risk/reward as fairly balanced and devoid of sufficient near-term catalysts to get us more constructive. Separately, we provide analysis herein which leads us to believe UNM has adequate capital strength to support downside risk under the scenario of another LTC reserve charge and/or a modest recession. Our 2016/17/18E EPS are $3.87/$4.10/$4.40, respectively, and incorporate $1.2b of cumulative buybacks ($400m annually) combined with low-single-digit growth in core operating income, resulting in a flattish ROE between 10.0% and 10.5%."
Shares of Unum Group closed at $36.58 yesterday.
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