Wunderlich Downgrading StanCorp Financial Group On "Employment Malaise"

Wunderlich Securities is downgrading shares of StanCorp Financial Group Inc. SFG to Hold from Buy, and lowering the price target to $47 from $50. In a note to clients, Wunderlich Securities writes, "We are lowering our rating on StanCorp Financial Group (SFG) to Hold from Buy and our price target to $47 from $50. In our opinion, a strong balance sheet cannot completely offset the increased probability of lower operating profits. Municipal workers represent the majority of SFG's revenues. Reports indicate state budgets are likely to remain under pressure for longer than initially anticipated. We expect the difficult labor market will result in elevated claims and limited top-line growth. Our revised price target of $47 is 1.1 times forecasted 2011 book value of $44.20, representing a modest premium to peers which trade at 0.9 times book value." Shares of SFG are down 94 cents in pre-market trading to $42.11, a loss of 2.2%.