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AFLAC (AFL)
NYSE:AFL

AFLAC (AFL) AI Stock Analysis

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AFLAC

(NYSE:AFL)

Rating:69Neutral
Price Target:
$114.00
▲(10.12%Upside)
AFLAC's strong financial performance and balanced valuation are key strengths, supported by stable earnings and robust capital deployment. However, technical indicators suggest caution, and recent cybersecurity issues introduce additional risks.
Positive Factors
Capital position
AFL's capital position remains strong, with significant buybacks and liquid assets above targets.
Sales growth
Sales increased 12.6% driven by Tsumitasu as well as initial sales from the new Miraito cancer product.
Shareholder returns
Buybacks exceeded expectations, which could be seen as a positive signal for shareholders.
Negative Factors
Earnings performance
AFL's 1Q:25 operating EPS was below expectations, indicating potential pressure on the stock price.
Investment income
Total investment income was lower, impacting earnings expectations.
Valuation concerns
Elevated price-to-earnings ratio might suggest the stock is overvalued, leading to potential downside.

AFLAC (AFL) vs. SPDR S&P 500 ETF (SPY)

AFLAC Business Overview & Revenue Model

Company DescriptionAFLAC Incorporated (AFL) is a leading provider of supplemental insurance products in the United States and Japan. Founded in 1955 and headquartered in Columbus, Georgia, AFLAC specializes in offering voluntary insurance policies that provide financial protection to policyholders in the event of illness or injury. The company's core products include accident, cancer, critical illness, hospital indemnity, dental, vision, and life insurance, aimed at both individual and corporate customers. AFLAC is renowned for its innovative approach to insurance and its distinctive marketing campaigns featuring the iconic AFLAC Duck.
How the Company Makes MoneyAFLAC makes money primarily through the sale of supplemental insurance policies in the U.S. and Japan. Revenue is generated from policy premiums paid by individual and corporate customers who seek financial protection against unexpected health events and accidents. AFLAC earns a significant portion of its revenue from its operations in Japan, which is one of the largest insurance markets globally. The company also invests the premiums collected in a diversified portfolio of assets, generating investment income that contributes to its overall earnings. Key factors contributing to AFLAC's revenue include strategic partnerships with companies to offer employee benefits, widespread distribution networks, and strong brand recognition. Additionally, its focus on cost control and efficient claims processing helps maintain profitability.

AFLAC Earnings Call Summary

Earnings Call Date:Apr 30, 2025
(Q1-2025)
|
% Change Since: -4.22%|
Next Earnings Date:Aug 05, 2025
Earnings Call Sentiment Neutral
Aflac's first quarter demonstrated strong sales growth in Japan and stable adjusted earnings per share, supported by solid capital deployment and high persistency rates. However, challenges include net investment losses, a decline in Japan's earned premiums, and increased expense ratios. While there are significant achievements, the presence of notable financial pressures balances the overall sentiment.
Q1-2025 Updates
Positive Updates
Cancer Insurance Sales Increase
Aflac Japan reported a 12.6% year-over-year sales increase, with a significant contribution from a 6.3% increase in cancer insurance sales.
Adjusted Earnings Per Share Stable
Adjusted earnings per diluted share were $1.66, unchanged from the first quarter of 2024, despite a $0.01 negative impact from foreign exchange.
Strong Capital Deployment
Aflac deployed $900 million to repurchase 8.5 million shares of stock and delivered $1.2 billion back to shareholders, maintaining a strong capital position.
U.S. Sales Growth
Aflac U.S. saw a 3.5% year-over-year increase in sales, with strong momentum in group life, disability, and dental segments.
High Persistency Rates
Persistency rates remained high in both Japan (93.8%) and the U.S. (79.3%), indicating customer retention and business stability.
Negative Updates
Net Investment Losses
Net earnings per diluted share were $0.05, significantly impacted by net investment losses compared to gains in the previous year.
Decline in Japan Earned Premiums
Aflac Japan's net and earned premiums declined 5% and 1.4%, respectively, due to deferred profit liability and reinsurance impacts.
Increased Expense Ratios
Expense ratios in Japan rose to 19.6%, driven by higher technology expenses, and the U.S. saw an increase in total benefit ratios by 120 basis points.
Variable Investment Income Below Expectations
Variable investment income ran $27 million below long-term return expectations, impacting financial performance.
Company Guidance
During the Aflac Incorporated First Quarter 2025 Earnings Call, the company provided several key financial metrics and updates on its operations. Aflac reported net earnings per diluted share of $0.05, impacted by net investment losses, while adjusted earnings per diluted share remained flat at $1.66 compared to the same quarter in 2024. In Japan, Aflac achieved a 12.6% year-over-year increase in sales, with notable growth in cancer insurance sales by 6.3%. The company also launched its new cancer insurance product, Miraito, which has shown positive initial results. Meanwhile, Aflac U.S. experienced a 3.5% year-over-year increase in sales, supported by strong performance in group life, disability, and network dental segments. The company maintained a strong capital position, deploying $900 million to repurchase 8.5 million shares and returning $1.2 billion to shareholders through dividends and buybacks. Aflac also reported an adjusted return on equity (ROE) of 12.7%, or 15.6% excluding foreign currency remeasurement, and a combined RBC ratio estimated to be above 600%.

AFLAC Financial Statement Overview

Summary
AFLAC's financial statements reveal strong profitability with robust operating margins and efficient cash management. However, challenges in sustaining revenue and free cash flow growth might affect future financial flexibility.
Income Statement
75
Positive
AFLAC's income statement shows strong gross and net profit margins, reflecting efficient operations and cost management. However, the revenue growth has been slightly inconsistent, with a decline in the most recent TTM period. EBIT and EBITDA margins remain robust, indicating healthy core business profitability.
Balance Sheet
70
Positive
The balance sheet indicates a solid equity position with a moderate debt-to-equity ratio, suggesting financial stability. However, there is a notable decline in total assets and equity over time, which could pose risks. The equity ratio is healthy, which enhances the company's financial resilience.
Cash Flow
65
Positive
Operating cash flow coverage of net income is strong, ensuring liquidity. However, there is a decline in free cash flow growth, reflecting potential challenges in maintaining cash generation. The cash flow from operations remains positive, supporting ongoing investments and dividends.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue17.09B19.13B18.84B19.15B21.55B22.26B
Gross Profit13.64B19.13B18.84B19.15B21.55B22.26B
EBITDA4.39B6.42B5.26B4.87B5.21B4.16B
Net Income3.59B5.44B4.66B4.42B4.23B4.78B
Balance Sheet
Total Assets120.26B117.57B126.72B131.74B157.54B165.09B
Cash, Cash Equivalents and Short-Term Investments72.41B6.23B28.22B79.68B103.75B111.02B
Total Debt7.75B7.50B7.36B7.44B7.96B7.90B
Total Liabilities93.92B91.47B104.74B111.60B7.96B7.90B
Stockholders Equity26.34B26.10B21.98B20.14B33.25B33.56B
Cash Flow
Free Cash Flow2.45B2.71B3.19B3.88B5.05B5.96B
Operating Cash Flow2.45B2.71B3.19B3.88B5.05B5.96B
Investing Cash Flow2.19B2.78B817.00M-1.54B-2.38B-4.62B
Financing Cash Flow-4.49B-3.49B-3.72B-3.55B-2.74B-1.11B

AFLAC Technical Analysis

Technical Analysis Sentiment
Negative
Last Price103.52
Price Trends
50DMA
104.40
Negative
100DMA
105.21
Negative
200DMA
105.96
Negative
Market Momentum
MACD
0.19
Negative
RSI
48.74
Neutral
STOCH
76.39
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AFL, the sentiment is Negative. The current price of 103.52 is above the 20-day moving average (MA) of 103.28, below the 50-day MA of 104.40, and below the 200-day MA of 105.96, indicating a neutral trend. The MACD of 0.19 indicates Negative momentum. The RSI at 48.74 is Neutral, neither overbought nor oversold. The STOCH value of 76.39 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for AFL.

AFLAC Risk Analysis

AFLAC disclosed 28 risk factors in its most recent earnings report. AFLAC reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks

AFLAC Peers Comparison

Overall Rating
UnderperformOutperform
Sector (61)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
MEMET
79
Outperform
$53.80B13.0516.08%2.83%8.77%110.90%
UNUNM
75
Outperform
$14.17B9.5814.68%2.07%1.69%25.54%
GLGL
74
Outperform
$9.93B9.7920.47%0.90%5.41%16.60%
PRPRU
70
Neutral
$38.47B17.208.04%4.97%2.47%6.88%
AFAFL
69
Neutral
$55.97B16.1614.41%2.24%-12.66%-29.30%
LNLNC
65
Neutral
$5.97B4.9716.91%5.15%8.31%-2.30%
61
Neutral
C$14.56B6.1620.17%5.70%26.93%-38.21%
* Financial Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
AFL
AFLAC
103.52
16.27
18.65%
LNC
Lincoln National
34.97
5.81
19.92%
MET
Metlife
80.15
12.62
18.69%
PRU
Prudential Financial
108.66
-2.90
-2.60%
GL
Globe Life
120.29
39.34
48.60%
UNM
Unum Group
81.24
32.68
67.30%

AFLAC Corporate Events

Business Operations and StrategyRegulatory Filings and Compliance
Aflac Investigates June 2025 Cybersecurity Breach
Negative
Jun 20, 2025

On June 12, 2025, Aflac Incorporated identified unauthorized access to its network, which was promptly contained. The company remains operational, with no ransomware affecting its systems, and continues to serve its policyholders. Aflac has engaged third-party cybersecurity experts to assist in reviewing potentially impacted files, which may include sensitive personal information. The company plans to notify regulators and affected individuals, offering free credit monitoring and identity theft protection services. The full impact of the incident is still unknown.

The most recent analyst rating on (AFL) stock is a Buy with a $112.00 price target. To see the full list of analyst forecasts on AFLAC stock, see the AFL Stock Forecast page.

Private Placements and FinancingBusiness Operations and Strategy
Aflac Issues ¥74.9 Billion in Senior Notes
Neutral
Jun 5, 2025

On May 29, 2025, Aflac Incorporated entered into a Note Purchase Agreement for a private placement of yen-denominated senior notes totaling ¥75.1 billion, intended for general corporate purposes. Subsequently, on June 5, 2025, the company issued registered senior notes amounting to ¥74.9 billion in a public offering, also aimed at general corporate purposes, reflecting Aflac’s strategic financial maneuvers to strengthen its capital structure.

The most recent analyst rating on (AFL) stock is a Hold with a $105.00 price target. To see the full list of analyst forecasts on AFLAC stock, see the AFL Stock Forecast page.

Executive/Board ChangesShareholder Meetings
Aflac’s Annual Shareholders Meeting Highlights Key Decisions
Neutral
May 8, 2025

On May 5, 2025, Aflac Incorporated held its Annual Meeting of Shareholders, where key decisions were made. Shareholders elected 11 members to the board of directors, approved a non-binding advisory proposal on executive compensation, and ratified the appointment of KPMG LLP as the independent registered public accounting firm for the year ending December 31, 2025. The meeting highlighted the significant voting power held by the J&A Alliance Trust, which represents 20% of the total voting power of the company’s common stock, and the voting restrictions in place due to a Shareholders Agreement established in 2019.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.Date of analysis: Jul 03, 2025