UPDATE: Citi Downgrades Unum Group (UNM) to Neutral

(updated to add analyst comment)

Citi downgraded Unum Group (NYSE: UNM) from Buy to Neutral with a price target of $53.00 (from $55.00).

Analyst Suneet Kamath comments "We argue UNM's core segments are generating near peak ROEs of ~16% combined in 2016, suggesting limited incremental upside. UNM's consolidated ROE has remained in the 10-11% range, driven by the low ROE of its Closed Block, which has consumed an increasing percentage of its capital over time. As such we argue that incremental upside in UNM's consolidated ROE and valuation has become increasingly dependent on a Closed Block solution to lower the capital allocated to this segment. Post conversations with companies at the 2017 AIFA Conference last week, we do not feel such a transaction is likely near-term. While we expect UNM will remain on pace for $400 million in annual buybacks ahead, its current P/E and P/B multiples are 35-40% higher than its weighted average buyback multiples since 2012. UNM has generally seen a larger benefit from share buybacks in terms of EPS and BVPS growth versus peers."

For an analyst ratings summary and ratings history on Unum Group click here. For more ratings news on Unum Group click here.

Shares of Unum Group closed at $48.81 Friday.

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