Standard & Poor's Ratings Services upgraded the outlook to “positive” from “stable” on Unum Group (UNM). The rating agency maintained its "BBB-" counterparty credit rating on the company and its "A-" counterparty credit and financial strength rating on its operating subsidiaries.
The upgraded outlook reflects Unum Group’s increased diversification, solid operating performance and statutory capital in excess of regulatory requirement.
Standard & Poor's affirmed the counterparty credit and financial strength ratings of "A-" on Unum's U.K. subsidiary, Unum Ltd. The outlook remains stable.
The credit rating expects the company to remain focused on sales growth in the more profitable smaller-case-size business and continue to maintain a strong financial position. For 2011, Standard & Poor's expects a year-over-year sales growth of 5%.
Unum Group posted a strong second-quarter with operating income pushing ahead of the Zacks Consensus Estimate and year ago earnings. Strong results at Unum US, Unum UK and Individual Disability – Closed Block attributed to the better-than-expected results. Better operating and investment results coupled with share buyback also aided the bottom line.
Over the last 7 days, 1 out of 13 analysts covering the stock lowered his estimate for the third quarter of 2011. However, over the last 30 days, 5 out of 13 analysts raised the estimate while 2 analysts lowered the same. For 2011, 1 out of 14 analysts raised the estimate over the last 7 days and 10 analysts raised the estimate over the last 30 days.
Unum Group expects 2011 operating income per share to grow in the range of 6% to 12%. The Zacks Consensus Estimate for third-quarter 2011 is 75 cents per share. For full year 2011, the Zacks Consensus Estimates is $2.96 per share.
We maintain our long-term “Neutral” recommendation on Unum Group. The quantitative Zacks #3 Rank (short-term Hold rating) for the company indicates no clear directional pressure on the shares over the near term.
Headquartered in Chattanooga, Tennessee, Unum Group was created following the June 1999 merger of Provident Companies Inc. and Unum Corporation. Along with disability insurance, the company provides long-term care insurance, life insurance, employer- and employee-paid group benefits and related services. The company competes with AFLAC Inc. (AFL), CIGNA Corporation (CI) and Lincoln National Corp. (LNC).
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UNUM GROUP (UNM): Free Stock Analysis Report
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