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Kemper (KMPR) Surges 8%: Is This an Indication of Further Gains?

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Kemper KMPR shares soared 8% in the last trading session to close at $48.52. The move was backed by solid volume with far more shares changing hands than in a normal session. This compares to the stock's 13% loss over the past four weeks.

Kemper continues to gain from profit restoration actions and diversified portfolio of niche businesses. Focus on specialty markets with limited competition and rate increase remains its strategic focus. Repositioning and focus to core states remains its priority for Preferred Property & Casualty Insurance segment. Its reinsurance program helps lower volatility from high-frequency, low severity events.

Its Life & Health Insurance segment should benefit from improving interest rate environment.

KMPR targets low double-digit return on equity over time.

This insurance holding company is expected to post quarterly loss of $0.49 per share in its upcoming report, which represents a year-over-year change of +68.2%. Revenues are expected to be $1.46 billion, up 0.5% from the year-ago quarter.

While earnings and revenue growth expectations are important in evaluating the potential strength in a stock, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.

For Kemper, the consensus EPS estimate for the quarter has remained unchanged over the last 30 days. And a stock's price usually doesn't keep moving higher in the absence of any trend in earnings estimate revisions. So, make sure to keep an eye on KMPR going forward to see if this recent jump can turn into more strength down the road.

The stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

Kemper is a member of the Zacks Insurance - Multi line industry. One other stock in the same industry, American International Group (AIG), finished the last trading session 6.4% higher at $52.77. AIG has returned -14.1% over the past month.

For American International Group , the consensus EPS estimate for the upcoming report has remained unchanged over the past month at $1.19. This represents a change of -21.7% from what the company reported a year ago. American International Group currently has a Zacks Rank of #2 (Buy).


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