Last week saw the newest annual earnings release from Unum Group (NYSE:UNM), an important milestone in the company's journey to build a stronger business. Revenues of US$12b were in line with forecasts, although statutory earnings per share (EPS) came in below expectations at US$6.50, missing estimates by 3.4%. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.
Following the latest results, Unum Group's nine analysts are now forecasting revenues of US$13.0b in 2024. This would be a credible 4.7% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to step up 17% to US$7.85. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$12.9b and earnings per share (EPS) of US$7.79 in 2024. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.
The consensus price target rose 5.6% to US$57.20despite there being no meaningful change to earnings estimates. It could be that the analystsare reflecting the predictability of Unum Group's earnings by assigning a price premium. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. The most optimistic Unum Group analyst has a price target of US$64.00 per share, while the most pessimistic values it at US$50.00. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or thatthe analysts have a strong view on its prospects.
Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. It's clear from the latest estimates that Unum Group's rate of growth is expected to accelerate meaningfully, with the forecast 4.7% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 0.6% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to see revenue growth of 5.8% annually. It seems obvious that, while the future growth outlook is brighter than the recent past, Unum Group is expected to grow slower than the wider industry.
The Bottom Line
The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Unum Group's revenue is expected to perform worse than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.
Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple Unum Group analysts - going out to 2026, and you can see them free on our platform here.
You can also view our analysis of Unum Group's balance sheet, and whether we think Unum Group is carrying too much debt, for free on our platform here.
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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.
