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Investing.com - Citizens JMP lowered its price target on Kemper Corp (NYSE:KMPR) to $75.00 from $85.00 while maintaining a Market Outperform rating following the company’s second-quarter 2025 results. According to InvestingPro analysis, Kemper appears undervalued at its current trading price of $61.49, with analysts setting targets between $75 and $90.
Kemper reported operating earnings per share of $1.30, missing both the Citizens JMP estimate of $1.46 and the consensus expectation of $1.52. The majority of the earnings shortfall was attributed to $18.7 million in unfavorable development in the commercial auto segment, which the firm noted was driven by the negative effects of social inflation. Despite this setback, InvestingPro data shows Kemper maintains strong fundamentals with a "GOOD" overall financial health score and a favorable P/E ratio of 11.42.
The company’s Specialty Auto net written premiums grew 7% with an 8% increase in policies in force, representing a slowdown from previous growth rates as the auto market normalizes. The core accident year combined ratio was 94%, higher than the 92% estimate but still within management’s target range.
Kemper’s book value ended the quarter at $46.45, up 2% from March 31, while book value excluding accumulated other comprehensive income reached $50.67. Net investment income came in at $96 million, below the $106 million estimate due to weak performance in alternative investments.
The company’s board of directors approved a new $500 million share repurchase authorization, which Citizens JMP suggested management might use "aggressively at current valuations, particularly against a likely slower growth backdrop going forward." InvestingPro highlights Kemper’s impressive 36-year track record of maintaining dividend payments, with a current yield of 2.08%. For deeper insights into Kemper’s valuation and financial health, investors can access the comprehensive Pro Research Report, available exclusively to InvestingPro subscribers.
In other recent news, Kemper Corporation reported its second-quarter 2025 earnings, which did not meet analysts’ expectations. The company posted an earnings per share (EPS) of $1.30, falling short of the anticipated $1.52, representing a 14.47% negative surprise. Additionally, revenue reached $1.23 billion, slightly below the forecasted $1.24 billion. Following these results, Piper Sandler downgraded Kemper’s stock from Overweight to Underweight, expressing concerns about the company’s policies-in-force growth and underwriting profitability. The research firm also adjusted its price target for Kemper to $50.00, down from $75.00. These developments highlight the challenges Kemper faces in meeting financial projections and maintaining growth. Investors are advised to consider these recent updates when evaluating the company’s performance.
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