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Unum Group (UNM) to Report Q2 Earnings: What's in the Cards?

Zacks Equity Research

Unum Group UNM will report second-quarter 2019 results on Jul 30 after market close. The company delivered positive earnings surprise in three of the last four quarters with the average beat being 2.16%.

Let’s see how things are shaping up for this announcement.

Unum Group’s second-quarter results are likely to benefit from continued strong performance at its core businesses. This is likely to drive premium growth as well as stable benefits experience.

Voluntary benefits and individual disability as well as vision product line likely continue to witness higher sales on expanded distribution.

Improving sales trends and solid persistency are expected to aid Unum U.S and Colonial Life’s premiums in the to-be-reported quarter.  Unum U.S. sales are likely to be aided by its dental platform.

The Zacks Consensus Estimate for Unum U.S. premium is pegged at nearly $1.5 billion while that for Colonial Life is pegged at $420 million.

Unum International is likely to benefit from the inclusion of Unum Poland and improved rate increases in the group long-term disability line and higher persistency.

Improved interest rate environment and expected higher new money yields are likely to support investment results in the soon-to-be-reported quarter. The Zacks Consensus estimate for the metric is pegged at $604 million.

However, policy terminations and maturities for the individual disability lines are expected to weigh on Closed Block segment.

Share buyback is likely to provide additional boost to the bottom line.

The Zacks Consensus Estimate for earnings is pegged at $1.34 per share, indicating 3.1% increase from the year-ago reported figure on 3.3% higher revenues.

What Our Quantitative Model States

Our proven model does not conclusively show that Unum Group is likely to beat on earnings in the to-be-reported period. This is because a stock needs to have both a positive Earnings ESP and a favorable Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. But that is not the case here as you will see below.

Earnings ESP: Unum Group has an Earnings ESP of -1.34%. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.

Unum Group Price and EPS Surprise

Unum Group Price and EPS Surprise

Unum Group price-eps-surprise | Unum Group Quote

Zacks Rank: Unum Group carries a Zacks Rank #4 (Sell)

We caution against Zacks Rank #4 or 5 (Strong Sell) stocks going into an earnings announcement, especially when the company is seeing negative estimate revisions.

Stocks to Consider

Some stocks worth considering from the insurance industry with the perfect mix of elements to surpass estimates this time around are as follows:

Lincoln National LNC, set to report second-quarter earnings on Jul 31, has an Earnings ESP of +0.71% and a Zacks Rank of 3. You can see the complete list of today’s Zacks #1 Rank stocks here..

The Hartford Financial Services Group HIG is set to report second-quarter earnings on Aug 1. It has an Earnings ESP of +0.54% and a Zacks Rank of 3.

American Financial Group AFG is set to report second-quarter earnings on Aug 6. It has an Earnings ESP of +0.66% and a Zacks Rank of 3.

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Unum Group (UNM) : Free Stock Analysis Report
 
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American Financial Group, Inc. (AFG) : Free Stock Analysis Report
 
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