Unum Group Just Missed Earnings - But Analysts Have Updated Their Models

It's been a sad week for Unum Group (NYSE:UNM), who've watched their investment drop 10% to US$71.81 in the week since the company reported its quarterly result. Revenues of US$3.4b were in line with forecasts, although statutory earnings per share (EPS) came in below expectations at US$1.92, missing estimates by 8.8%. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

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Taking into account the latest results, the consensus forecast from Unum Group's eight analysts is for revenues of US$13.3b in 2025. This reflects a satisfactory 3.1% improvement in revenue compared to the last 12 months. Statutory earnings per share are expected to fall 19% to US$7.24 in the same period. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$13.2b and earnings per share (EPS) of US$7.58 in 2025. So it looks like there's been a small decline in overall sentiment after the recent results - there's been no major change to revenue estimates, but the analysts did make a small dip in their earnings per share forecasts.

View our latest analysis for Unum Group

It might be a surprise to learn that the consensus price target was broadly unchanged at US$94.23, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. Currently, the most bullish analyst values Unum Group at US$114 per share, while the most bearish prices it at US$85.00. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Unum Group shareholders.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Unum Group's past performance and to peers in the same industry. It's clear from the latest estimates that Unum Group's rate of growth is expected to accelerate meaningfully, with the forecast 6.2% annualised revenue growth to the end of 2025 noticeably faster than its historical growth of 0.3% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 5.4% annually. Unum Group is expected to grow at about the same rate as its industry, so it's not clear that we can draw any conclusions from its growth relative to competitors.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Unum Group. They also reconfirmed their revenue estimates, with the company predicted to grow at about the same rate as the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for Unum Group going out to 2027, and you can see them free on our platform here.

That said, it's still necessary to consider the ever-present spectre of investment risk. We've identified 1 warning sign with Unum Group , and understanding it should be part of your investment process.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.