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Aflac Incorporated (AFL), headquartered in Columbus, Georgia, provides supplemental health and life insurance products. Valued at $59.7 billion by market cap, AFL is the largest provider of supplemental insurance. Its products include accident and disability, cancer expense, short-term disability, sickness and hospital indemnity, hospital intensive care, and fixed-benefit dental plans.
Shares of this leading supplemental insurer have outperformed the broader market considerably over the past year. AFL has gained 34.8% over this time frame, while the broader S&P 500 Index ($SPX) has rallied nearly 36.8%. In 2024, AFL stock is up 31.2%, surpassing SPX’s 25.7% rise on a YTD basis.
Zooming in further, AFL’s outperformance looks less pronounced than iShares U.S. Insurance ETF (IAK). The exchange-traded fund has gained about 38.7% over the past year. Moreover, AFL’s gains on a YTD basis slightly lags behind the ETF’s 31.3% returns over the same time frame.
On Oct. 30, AFL announced its Q3 earnings, which topped its EPS estimates but fell short of revenue expectations. Despite Aflac’s strong performance, shares dipped 4.8% in the following trading session due to weaker buybacks and U.S. results.
The company also declared the fourth quarter dividend of $0.50 per share, payable on December 2, 2024.
For the current fiscal year, ending in December, analysts expect AFL’s EPS to grow 15.1% to $7.17 on a diluted basis. The company’s earnings surprise history is mixed. It beat the consensus estimate in three of the last four quarters while missing the forecast on another occasion.
However, among the 17 analysts covering AFL stock, the consensus is a “Hold.” That’s based on two “Strong Buy” ratings, one “Moderate Buy,” 11 “Holds,” and three “Strong Sells.”
This configuration has been consistent over the past months.
On Nov. 5, Wells Fargo & Company (WFC) raised Aflac’s price target to $107 from $106, while maintaining an “Equal Weight” rating. Wells Fargo expects Aflac to deploy capital selectively, prioritizing high-return opportunities.
While AFL currently trades above its mean price target of $101.47, the Street-high price target of $124 suggests an upside potential of 14.5%.
On the date of publication, Kritika Sarmah did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
