Street Calls of the Week
Investing.com - Raymond James downgraded Kemper Corp (NYSE:KMPR) from Outperform to Market Perform following the abrupt departure of CEO and President Joseph Lacher. The insurance company, currently trading near its 52-week low at $45.72, appears undervalued according to InvestingPro analysis.
The insurance company announced that Lacher will step down effective immediately after nearly a decade in the role. C. Thomas Evans, Jr., Kemper’s Executive Vice President, Secretary, and General Counsel, has been appointed as Interim CEO. Despite the leadership uncertainty, Kemper maintains strong fundamentals with a perfect Piotroski Score of 9, as reported by InvestingPro.
Raymond James maintained its operating EPS estimates at $5.60 for 2025, $6.00 for 2026, and $6.40 for 2027, but expressed concern about the timing of the leadership change coming near year-end.
The downgrade follows a challenging period for Kemper, whose stock dropped over 20% after reporting second-quarter 2025 earnings that showed slowing top-line growth to high-single digits and a deteriorating Specialty P&C combined ratio.
Raymond James cited the CEO transition alongside elevated competition and adverse development from bodily injury claims as factors likely to drive below-peer average ROE results over the next 12 months.
In other recent news, Kemper Corporation announced a significant leadership change as Joseph P. Lacher, Jr. stepped down as President and CEO after nearly a decade, though he will continue in an advisory role until the end of 2025. C. Thomas Evans, Jr. has been appointed as the Interim CEO while the company searches for a permanent replacement. Additionally, Kemper revealed a $150 million accelerated share repurchase agreement with Goldman Sachs, expecting an initial delivery of over 2.2 million shares.
In terms of financial performance, Kemper reported operating earnings per share of $1.30 for the second quarter of 2025, falling short of both Citizens JMP’s estimate of $1.46 and the consensus expectation of $1.52. This shortfall was largely due to $18.7 million in unfavorable development in the commercial auto segment, attributed to social inflation. Following these results, Raymond James downgraded Kemper from Strong Buy to Outperform, citing increased competition in the Non-Standard Personal Auto market, particularly in Florida. Citizens JMP also adjusted its price target for Kemper to $75.00 from $85.00 while maintaining a Market Outperform rating.
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