UPDATE: Keefe, Bruyette & Woods Assumes Coverage On Unum Group On Mixed Factors

In a report published Friday, Keefe, Bruyette & Woods analyst Ryan Krueger assumed coverage on Unum Group UNM with a Market Perform rating and $38.00 price target. In the report, Keefe, Bruyette & Woods noted, “We are assuming coverage of UNM at Market Perform with a $38 price target. UNM combines an attractive set of group & voluntary benefits businesses (66% of capital) with a low return closed block of long-term care & individual disability (33% of capital). The ongoing operations are performing well, generating 14% ROEs in businesses that are highly desired in the post-crisis life insurance world. Conversely, the closed block is generating a 3% ROE with risk of future long-term care reserve charges. We value UNM at 1.1x forward book, reflective of an 11% ROE outlook and LTC risk, and assume coverage at Market Perform.” Unum Group closed on Thursday at $33.62.