We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Here's Why Prudent Investors are Holding Aflac (AFL) Shares Now
Read MoreHide Full Article
Aflac Incorporated (AFL - Free Report) is well-poised to grow on the back of its cost-curbing measures, global investments, growing network in the domestic market and expanding product suite.
Based in Columbus, GA, Aflac operates as a supplemental health and life insurance products provider. It has strong footprints in the United States and Japan. The company has a market cap of $48.9 billion.
Zacks Rank & Price Performance
AFL currently carries a Zacks Rank #3 (Hold). In the past year, the stock has gained 34.6% compared with the industry’s 30.2% growth.
Image Source: Zacks Investment Research
Trend in Estimates
The Zacks Consensus Estimate for AFL’s 2024 earnings is pegged at $6.43 per share, indicating a 3.2% increase from the year-ago reported figure of $6.23. The estimate rose 1.1% in the past 60 days. The consensus mark for current-year revenues is $17.3 billion.
Key Drivers
Aflac expects improved sales in its Aflac Japan segment, driven by strategic initiatives such as product launches, updates and distribution strategies. Moreover, the positive performance of Japan Post contributes to the anticipated growth. A medical product launched in mid-September has shown a promising start, thus further bolstering the company's outlook.
Management has expressed confidence in the robust sales performance within its U.S. business. The anticipated strength is attributed to improving productivity and contributions from various platforms, including network, dental, vision, and group life and disability. The company expects U.S. net earned premiums to grow in the range of 3-5% in 2024. Aflac revealed that its strategic alliance with Trupanion will focus on growing its pet insurance business footprint in North America. This will further boost the U.S. results in the future. These factors are poised to sustain positive results for the company.
Per the 2023-2024 Aflac WorkForces Report, benefits programs play a vital role in employee satisfaction and well-being. According to the report, 82% of employers believe that offering supplemental health insurance aids them with recruitment, thereby, improving AFL’s prospects
A significant improvement in the company’s expense ratio is expected to contribute to a decline in the combined ratio below the previous year's level. The company expects to operate in the 35-37% expense ratio over time. It also aims to achieve a 38-40% expense ratio for its U.S. segment in 2024, which is expected to enhance margins.
The implementation of cost-saving initiatives is anticipated to be a driving force for bottom-line growth. AFL's commitment to maintaining an agile workforce is poised to enhance efficiency in the medium to long term.
Aflac's robust balance sheet, highlighted by $4.3 billion in cash and cash equivalents as of Dec 31, 2023, positions the company favorably for initiatives aimed at enhancing shareholder value. With expected debt maturities of $1.3 billion over the next five years, Aflac maintains financial flexibility.
In the fourth quarter, the company showed confidence in its financial position by repurchasing shares amounting to $700 million. As of the end of the fourth quarter, it still had 77.7 million shares available for further buybacks, highlighting its commitment to returning value to shareholders. Management announced dividends of 50 cents per share for the fourth quarter of 2023, indicating a rise of 19% year over year.
However, Aflac’s net cash from operations declined 15.2% in 2021, 23.2% in 2022 and 17.8% in 2023. This sustained trend could potentially impact the its ability to support and sustain future operations. However, we believe that a systematic and strategic plan of action will drive growth in the long term.
The Zacks Consensus Estimate for Amerisafe’s 2024 earnings is pegged at $2.48 per share, which remained stable over the past week. AMSF beat earnings estimates in three of the past four quarters and missed once, with an average surprise of 9.8%.
The Zacks Consensus Estimate for Employers Holdings’ 2024 earnings is pegged at $3.73 per share, which remained stable over the past week. The consensus mark for EIG’s revenues in 2024 is pegged at $890.9 million.
The Zacks Consensus Estimate for Unum Group’s 2024 earnings is pegged at $8.18 per share, which indicates a year-over-year increase of 6.8%. The estimate remained stable over the past week. UNM beat earnings estimates in three of the past four quarters and missed once, with an average surprise of 5.2%.
Unique Zacks Analysis of Your Chosen Ticker
Pick one free report - opportunity may be withdrawn at any time
Image: Bigstock
Here's Why Prudent Investors are Holding Aflac (AFL) Shares Now
Aflac Incorporated (AFL - Free Report) is well-poised to grow on the back of its cost-curbing measures, global investments, growing network in the domestic market and expanding product suite.
Based in Columbus, GA, Aflac operates as a supplemental health and life insurance products provider. It has strong footprints in the United States and Japan. The company has a market cap of $48.9 billion.
Zacks Rank & Price Performance
AFL currently carries a Zacks Rank #3 (Hold). In the past year, the stock has gained 34.6% compared with the industry’s 30.2% growth.
Image Source: Zacks Investment Research
Trend in Estimates
The Zacks Consensus Estimate for AFL’s 2024 earnings is pegged at $6.43 per share, indicating a 3.2% increase from the year-ago reported figure of $6.23. The estimate rose 1.1% in the past 60 days. The consensus mark for current-year revenues is $17.3 billion.
Key Drivers
Aflac expects improved sales in its Aflac Japan segment, driven by strategic initiatives such as product launches, updates and distribution strategies. Moreover, the positive performance of Japan Post contributes to the anticipated growth. A medical product launched in mid-September has shown a promising start, thus further bolstering the company's outlook.
Management has expressed confidence in the robust sales performance within its U.S. business. The anticipated strength is attributed to improving productivity and contributions from various platforms, including network, dental, vision, and group life and disability. The company expects U.S. net earned premiums to grow in the range of 3-5% in 2024. Aflac revealed that its strategic alliance with Trupanion will focus on growing its pet insurance business footprint in North America. This will further boost the U.S. results in the future. These factors are poised to sustain positive results for the company.
Per the 2023-2024 Aflac WorkForces Report, benefits programs play a vital role in employee satisfaction and well-being. According to the report, 82% of employers believe that offering supplemental health insurance aids them with recruitment, thereby, improving AFL’s prospects
A significant improvement in the company’s expense ratio is expected to contribute to a decline in the combined ratio below the previous year's level. The company expects to operate in the 35-37% expense ratio over time. It also aims to achieve a 38-40% expense ratio for its U.S. segment in 2024, which is expected to enhance margins.
The implementation of cost-saving initiatives is anticipated to be a driving force for bottom-line growth. AFL's commitment to maintaining an agile workforce is poised to enhance efficiency in the medium to long term.
Aflac's robust balance sheet, highlighted by $4.3 billion in cash and cash equivalents as of Dec 31, 2023, positions the company favorably for initiatives aimed at enhancing shareholder value. With expected debt maturities of $1.3 billion over the next five years, Aflac maintains financial flexibility.
In the fourth quarter, the company showed confidence in its financial position by repurchasing shares amounting to $700 million. As of the end of the fourth quarter, it still had 77.7 million shares available for further buybacks, highlighting its commitment to returning value to shareholders. Management announced dividends of 50 cents per share for the fourth quarter of 2023, indicating a rise of 19% year over year.
However, Aflac’s net cash from operations declined 15.2% in 2021, 23.2% in 2022 and 17.8% in 2023. This sustained trend could potentially impact the its ability to support and sustain future operations. However, we believe that a systematic and strategic plan of action will drive growth in the long term.
Key Picks
Some better-ranked stocks in the broader Finance space are AMERISAFE, Inc. (AMSF - Free Report) , Employers Holdings, Inc. (EIG - Free Report) and Unum Group (UNM - Free Report) . Amerisafe and Employers Holdings sport a Zacks Rank #1 (Strong Buy), while Unum Group carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Amerisafe’s 2024 earnings is pegged at $2.48 per share, which remained stable over the past week. AMSF beat earnings estimates in three of the past four quarters and missed once, with an average surprise of 9.8%.
The Zacks Consensus Estimate for Employers Holdings’ 2024 earnings is pegged at $3.73 per share, which remained stable over the past week. The consensus mark for EIG’s revenues in 2024 is pegged at $890.9 million.
The Zacks Consensus Estimate for Unum Group’s 2024 earnings is pegged at $8.18 per share, which indicates a year-over-year increase of 6.8%. The estimate remained stable over the past week. UNM beat earnings estimates in three of the past four quarters and missed once, with an average surprise of 5.2%.