- Horace Mann Educators ( NYSE: HMN ) eroded 12.3% until noon trading today ; Piper Sandler slashed its price target to $38 from $40 while maintaining its Neutral rating on the shares.
- The cut comes after the Q2 pre-announcement and meaningfully lower 2022 outlook.
- Analyst John Barnidge indicates that Horace Mann has been recently faced with increased need to take rate in its P&C business, and the preannouncement likely increases that need further still.
- Yesterday, the company said it experienced Q2 catastrophe losses well above the company’s 10-year historical average; significant equity market declines during the quarter resulted in unfavorable DAC unlocking.
- Based on the same, the company updated its FY22 guidance with core EPS to range between $2.10 to $2.30 including a Q2 loss per share of ~10 cents to 20 cents.
- Due to the level of storm activity, the company now expects Q2 catastrophe losses to be ~$44 to $47M, pretax.
- The company plans to recognize the impact of inflation trends by adding ~$6M, pretax, to Property & Casualty reserves.
- Total NII for from the managed portfolio for 2022 is expected to be at the low end of the guided range of $310 to $320M; Core earnings for the Property & Casualty segment are now expected to be in the range of $10 to $14M compared to guidance of $44 to $48M.
- Q2 results are scheduled to release on Aug.4.
For further details see:
Horace Mann Educators price target cut post Q2 results estimates and lower 2022 outlook