Unum (UNM) Stock Forecast & Price Target

Unum Group's positive outlook is supported by its enhanced free cash flow (FCF) generation driven by higher interest rates, particularly benefiting its long-term care (LTC) business. The recent internal reinsurance transaction that freed up approximately $630 million of capital, alongside a strong capitalization and a diverse product portfolio, bolsters the company’s financial stability and operational efficiency compared to its competitors. Additionally, a favorable employment market is expected to sustain growth and margins within Unum's group benefits operations, ultimately reinforcing the overall financial health and market position of the company.

Unum Group faces a negative outlook primarily due to projected earnings per share (EPS) estimates declining approximately 2% for 2025, largely attributed to the integration of profitable individual disability (IDI) business in aiding long-term care (LTC) transactions. The potential risks of recession and rising unemployment are anticipated to negatively impact Unum's growth trajectory and margins, particularly in its core business segments, including group benefits. Additionally, the higher mortality and morbidity rates, along with lower long-term interest rates, are expected to further exert pressure on the company's capital levels and overall earnings power, leading to a diminished valuation of its remaining business segments.