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Aflac Incorporated (AFL), headquartered in Columbus, Georgia, is a leading provider of supplemental insurance solutions, offering a broad range of financial protection products to individuals and businesses. With a market cap of $56.6 billion, Aflac operates primarily in the U.S. and Japan, providing insurance policies that help cover expenses not covered by traditional health insurance. The company is set to release its Q4 earnings on Wednesday, Jan. 29.
Ahead of this event, analysts expect Aflac to report a profit of $1.63 per share, up 30.4% from $1.25 per share in the year-ago quarter. The company has surpassed Wall Street's earnings estimates in three of the last four quarters while missing on one other occasion.
In fiscal Q3, the company reported an EPS of $2.16, topping the consensus estimates by 27.1%. Aflac's results were driven by higher investment income, cost control, and reduced claims in Japan.
For the full year, analysts expect AFL to report EPS of $7.27, up 16.7% from $6.23 in fiscal 2023.
Shares of Aflac have gained 24.3% over the past 52 weeks, underperforming both the S&P 500 Index's ($SPX) 25.8% rise and the Financial Select Sector SPDR Fund’s (XLF) 28% return over the same period.
Aflac's underperformance stems from increased competition, regulatory challenges, and slower market growth, with its reliance on supplemental insurance products making it sensitive to market shifts.
On Oct. 30, Aflac reported its mixed Q3 earnings, which led to a 4.8% decline in shares during the subsequent trading session. Revenue fell 40.4% year over year to $2.95 billion, significantly missing the projections, with weaker U.S. results and reduced share buybacks contributing to investor concerns.
Analysts’ consensus opinion on AFL stock is cautious, with a “Hold” rating overall. Out of 17 analysts covering the stock, three advise a “Strong Buy” rating, one suggests a “Moderate Buy” rating, 10 give a “Hold” rating, and three recommend a “Strong Sell.”
AFL's average analyst price target is $104, suggesting a potential upside of 1.1% from the current levels.
