KMPR · Kemper
Conviction · Low · more likely to lag the S&P 500 over the next three months
Wrong if: a daily close above $39.93
Note written ·
Price against the kill line
14.5% clear of its kill line on the 13 November 2026 close.
How to read this
This note expects the shares to lag the market, so its kill line sits above the price: a close above the red mark would prove the view wrong. Prices run from low on the left to high on the right. The dot is where the stock closed on 13 November 2026, left of the mark while it is below the line; a dot right of the mark has closed through it.
The scale is stretched near the line, so close calls are easy to see. More than 8% from the line, the stock reads well clear, with a hollow dot to show the figure is off the drawn scale.
The kill line is the research note's own test. The portfolio sells on business facts, not on a price. How the portfolio decides
Three months against the kill line
Daily closes, to . Red: the kill line, a daily close above $39.93, on record since 11 November 2026. The shares are up 31.9% since the close; the S&P 500 is down 2.1% over the same sessions. Figures in the note can cover a different window.
Kill line
A daily close above $39.93, the highest close of the past year (12 December 2025), would show the shares leading the S&P 500. So would a fourth-quarter 2026 report with personal auto policies in force growing quarter on quarter.
Research onlyNot in the portfolio.
Key figures from the filings · Financials
Quarter to 30 September 2026, filed 9 November 2026; valuation at the 13 November 2026 close
- Revenue, latest quarter ($M)
- 1,091
- Revenue, change on a year (%)
- −12.0
- Operating margin (%)
- 5.9
- Free cash flow, four quarters ($M)
- 319
- Net cash, cash less debt ($M)
- −865
- Enterprise value to sales (×)
- 0.7
- Free-cash-flow yield (%)
- 15.8
All filed numbers
What Kemper reports to the SEC in its quarterly and annual filings. Each group states its period and filing date once; a figure dated otherwise says so. Built from the filings known on .
| Quarter to | Revenue ($M) | On a year (%) | Operating margin (%) |
|---|---|---|---|
| first filed | 1,091 | −12.0 | 5.9 |
| first filed | 1,093 | −10.8 | −42.7 |
| first filed | 1,107 | −7.2 | −0.7 |
| first filed | 1,131 | −4.7 | — |
| first filed | 1,240 | +5.2 | −2.7 |
| first filed | 1,226 | +8.5 | 7.1 |
| Pre-tax income ($M) | Not reported |
| Net income ($M) four quarters: −422 | 52.4 |
| Diluted shares, change on a year (%) against the quarter to 30 September 2025 | −3.1 |
| Operating cash flow ($M) | 357 |
| Capital spending ($M) | 38.5 |
| Free cash flow ($M) | 319 |
| Cash and short-term investments ($M) | 80.5 |
| Debt ($M) long-term debt | 945 |
| Net cash, cash less debt ($M) | −865 |
| Deferred revenue ($M) | Not reported |
| Backlog, orders not yet delivered ($M) | Not reported |
| Receivables ($M) | 970 |
| Inventory ($M) | Not reported |
| Shareholders' equity ($M) | 2,133 |
| Market value ($M) | 2,012 |
| Enterprise value, market value plus net debt ($M) | 2,877 |
| Enterprise value to sales (×) | 0.7 |
| Enterprise value to operating income (×) | Not available |
| Price to earnings (×) | Not meaningful |
| Price to book value (×) | 0.9 |
| Free-cash-flow yield (%) | 15.8 |
Short interest (FINRA, settled 15 October 2026, published 26 October 2026): 9.0% of shares outstanding sold short, 6.4 days of average trading to cover, +4.6% since the previous report.
| Window | Bought | Sold |
|---|---|---|
| 90 daysfrom | $0 | $0 |
| 12 monthsfrom | $368K | $17K |
The thesis
Kemper's full third-quarter report on 9 November 2026 confirmed a return to profit, but it also showed the personal auto book shrinking fast and the underlying combined ratio still above 100%. The shares rose 30.7% over three months to a $34.76 close on 11 November 2026, so they already price a recovery that underwriting has not finished. The rating is Low, meaning the shares are more likely to lag the S&P 500 than lead it. The fourth-quarter report, expected in early 2027, decides whether policy counts stop falling.
Kemper's 8-K of 9 November 2026 reported net income of $52.4 million, or $0.88 per diluted share, and adjusted net operating income of $59.9 million, or $1.01 per share. A year earlier those figures were a $21.0 million loss and $20.4 million. StockStory put the adjusted figure 30.2% above the $0.78 S&P consensus on 9 November 2026.
The combined ratio is claims plus expenses as a share of premiums, and a figure below 100% means an underwriting profit. The Specialty property and casualty ratio was 99.2%, against 104.8% a year earlier. The underlying ratio, which strips out catastrophes and reserve changes, was 101.7%, worse than 99.6% a year earlier and only slightly better than 102.3% in the second quarter.
The full report added the figure the 28 October 2026 pre-release left out. Personal auto policies in force fell about 10% in the quarter to roughly 835,000, from 1.1 million a year earlier, MarketBeat reported from the 10 November 2026 call. Management said counts would level off a couple of quarters after profitability improves.
Bullish and bearish views on Kemper Corporation
The bull case on Kemper Corporation (KMPR), in brief: operating earnings tripled from a year ago. The bear case: personal auto premium is shrinking fast.
Bull case
- Operating earnings tripled from a year ago. Adjusted net operating income was $1.01 per share against $0.33 in the third quarter of 2025, per the 9 November 2026 8-K. StockStory put the beat over consensus at 30.2% the same day.
- California margins improved sharply. The California personal auto combined ratio was 98.2% and its underlying ratio 102.1%, against 110.6% and 109.2% in the first quarter, per the 8-K. Management expects the underlying California ratio to fall below 100% during 2027, MarketBeat reported from the 10 November 2026 call.
- Rate increases are still earning in. California personal auto rate increases total about 13% since the start of 2025, including about 50% on bodily injury coverage, management said on the 10 November 2026 call. Six-month policies carry that rate into earned premium through 2027.
- One item inflated the underlying ratio. Excluding a $10 million Florida excess-profit liability increase, the Specialty underlying ratio would have been 100.5%, management said on the 10 November 2026 call.
- The chief executive bought shares in August. Stephen McAnena bought 3,000 shares at $26.50 on 13 August 2026, per his SEC Form 4.
Bear case
- Personal auto premium is shrinking fast. Personal auto earned premium fell to $599.9 million in the third quarter from $785.1 million a year earlier, per the 8-K. Total revenue was $1,090.6 million, down $149.1 million year over year.
- Underwriting still loses money underneath. The personal auto underlying ratio was 103.3%, MarketBeat reported from the call, and McAnena said "we're not declaring victory."
- Reserve releases flatter the headline ratio. Favorable prior-year development of $23.2 million added 2.7 points to the third-quarter result, per the 8-K. A year earlier the same line was a $51.4 million charge.
- Commercial auto costs are rising. The commercial auto underlying ratio rose 4.1 points to 97.8% on higher bodily injury costs, MarketBeat reported from the 10 November 2026 call. Kemper filed a second 6.9% rate increase in September.
- Book value fell and missed estimates. Book value per share was $36.20 on 30 September 2026, down 21% from $45.71 at year-end 2025, per the 8-K. StockStory put the figure 11.4% below the $40.88 estimate.
- Peers earn far wider margins. TIKR cited an 88.7% third-quarter combined ratio at Progressive and second-quarter auto ratios of 83.3% at Allstate and 89.9% at Mercury General on 29 October 2026.
Price setup
The shares closed at $34.76 on 11 November 2026, above the 50-day moving average of $28.73 and the 200-day moving average of $29.14 on adjusted daily closes. The three-month gain is 30.7%. The close is 16.7% below the 52-week intraday high of $41.74 on 17 December 2025 and well above the 52-week closing low of $22.90 on 3 June 2026.
The full report moved the shares less than the pre-release did. The close was $33.39 on 6 November 2026 and $33.15 on 9 November 2026, the day of the report, then $34.39 on 10 November 2026, the day of the call. The highest close since the pre-release was $35.76 on 4 November 2026.
The 11 November 2026 close of $34.76 sits between adjusted book value of $28.13 per share and reported book value of $36.20, per the 8-K. That price assumes earnings keep recovering, while the premium base that produces them is still getting smaller. Analyst targets published before the 9 November 2026 report do not reflect it, and no post-report target change was found.
Catalysts ahead
- 2 December 2026: Quarterly dividend of $0.32 per share payable. Shows the board held the payout after the $460.0M second-quarter goodwill write-down and the 21% fall in book value per share during 2026.
- ~9 February 2027 (est.): Fourth-quarter and full-year 2026 results. Shows whether personal auto policies in force stop falling from about 835,000, and whether the underlying combined ratio moves toward 100% without reserve releases.
What would change the view
A daily close above $39.93, the highest close of the past year (12 December 2025), would show the shares leading the S&P 500. So would a fourth-quarter 2026 report with personal auto policies in force growing quarter on quarter.
What it trades with
The shares have moved on company news. The late-October jump followed Kemper's own pre-release, and Progressive, Allstate and Mercury General report much lower auto ratios, per TIKR on 29 October 2026. So Kemper's results depend more on its own repair than on the auto insurance cycle.
Competition still matters for volume. Management said rivals' pricing could change when its policy counts level off, MarketBeat reported from the 10 November 2026 call. If peers cut auto rates while Kemper keeps raising them, the book would keep shrinking. Net investment income of about $107 million in the third quarter, per the 28 October 2026 pre-release, ties part of earnings to interest rates.
The evidence, claim by claim (8)
- Q3 2026 net income $52.4M ($0.88 per diluted share) and adjusted net operating income $59.9M ($1.01), versus a $21.0M loss and $20.4M ($0.33) in Q3 2025. Kemper 8-K Exhibit 99.1, 9 November 2026 · as of
- Specialty P&C combined ratio 99.2% versus 104.8% in Q3 2025; underlying combined ratio 101.7% versus 99.6% in Q3 2025. Kemper 8-K Exhibit 99.1, 9 November 2026 · as of
- Personal auto earned premium $599.9M versus $785.1M in Q3 2025; commercial auto earned premium $258.0M versus $232.2M. Kemper 8-K Exhibit 99.1, 9 November 2026 · as of
- Personal auto policies in force about 835,000, down roughly 10% in the quarter and from 1.1 million a year earlier; personal auto underlying ratio 103.3%. Kemper Q3 2026 earnings call, 10 November 2026 (MarketBeat summary) · as of
- California personal auto combined ratio 98.2% and underlying ratio 102.1% in Q3 2026, versus 110.6% and 109.2% in Q1 2026. Kemper 8-K Exhibit 99.1, 9 November 2026 · as of
- Favorable prior-year reserve development of $23.2M (2.7 points) in Q3 2026, versus $51.4M adverse in Q3 2025. Kemper 8-K Exhibit 99.1, 9 November 2026 · as of
- Book value per share $36.20, down 21% from $45.71 at year-end 2025; adjusted book value per share $28.13 versus $28.06. Kemper 8-K Exhibit 99.1, 9 November 2026 · as of
- Adjusted EPS of $1.01 beat the $0.78 S&P consensus by 30.2%; book value per share missed the $40.88 estimate by 11.4%. StockStory, 9 November 2026 · as of
Sources
- KEMPER Corp - Form 8-K - FY2026 · sec.gov
- Kemper Q3 Earnings Call Highlights · marketbeat.com ·
- Kemper's (NYSE:KMPR) Q3 2026 earnings results: revenue in line with expectations · markets.financialcontent.com
- KEMPER Corp - Form 8-K - FY2026 · sec.gov ·
- TIKR ·
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