AFLAC (AFL) AI Stock Analysis

• Market Cap: $55.66B
• Dividend Yield: 2.04%
• Average Volume (3M): 2.11M
• Price to Earnings (P/E): 10.6
• Beta (1Y): 0.46
• Revenue Growth: 1.21%
• EPS Growth: 24.08%
• Country: US
• Employees: 12,694
• Sector: Financial
• Sector Strength: 80
• Industry: Insurance - Life
• EPS (TTM): 9.61
• Shares Outstanding: 545,814,600
• 10 Day Avg. Volume: 2,069,437
• 30 Day Avg. Volume: 2,109,754
• PEG Ratio: 0.44
• Price to Book (P/B): N/A
• Price to Sales (P/S): 3.11
• Price to Cash Flow (P/CF): 44.40
• P/FCF Ratio: 39.40
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $105.92
• Price Target Upside: 3.86% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 13

AFLAC presents a solid investment opportunity with strengths in financial performance, particularly in profitability and balance sheet stability. The earnings call underscores robust earnings growth and shareholder returns, despite challenges in specific segments. Valuation metrics suggest the stock is fairly priced, with technical analysis pointing to short-term strength yet medium-term caution.

Positive Factors

Capital Position

AFL's capital position remains strong, with significant buybacks and liquid assets above targets.

Earnings

AFL is expected to perform better than consensus expectations.

Negative Factors

Financial Performance

AFL's 4Q:24 operating EPS and sales growth in Japan and the US missed expectations, raising concerns about its high P/E ratio.

Market Dynamics

Continued growth headwinds are likely given competitive/secular dynamics in AFL's Japan and U.S. markets.

Sales Growth

Sales growth in AFL Japan was significantly lower than expected, particularly due to weaker cancer product sales.

AFLAC Business Overview & Revenue Model

Company Description

Aflac Incorporated, through its subsidiaries, provides supplemental health and life insurance products. It operates through two segments, Aflac Japan and Aflac U.S. The Aflac Japan segment offers cancer, medical, nursing care income support, GIFT, and whole and term life insurance products, as well as WAYS and child endowment plans under saving type insurance products in Japan. The Aflac U.S. segment provides cancer, accident, short-term disability, critical illness, hospital indemnity, dental, vision, long-term care and disability, and term and whole life insurance products in the United States. It sells its products through sales associates, brokers, independent corporate agencies, individual agencies, and affiliated corporate agencies. The company was founded in 1955 and is based in Columbus, Georgia.

How the Company Makes Money

Aflac makes money primarily through the sale of supplemental insurance products. The company generates revenue by collecting premiums from policyholders, which form the core of its income. Aflac's key revenue streams include premiums from its life and health insurance offerings, particularly in Japan and the United States. In Japan, Aflac is a leader in the cancer and medical insurance markets, while in the U.S., it focuses on individual and group insurance products. The company also invests the premiums received in a diversified portfolio of assets, which contributes to its income through investment gains. Partnerships with employers and brokers play a significant role in distributing Aflac's products, allowing the company to reach a broad customer base and enhance its sales channels. Aflac's financial strength is bolstered by its strategic risk management practices and its ability to adapt to changing market conditions.

AFLAC Financial Statement Overview

Summary

AFLAC exhibits robust financial health with strong profitability, a solid balance sheet devoid of debt, and healthy cash flows. Despite inconsistent revenue growth, the company maintains strong margins and cash generation, with high equity levels providing stability in the insurance sector.

Income Statement

AFLAC has demonstrated strong profitability with a high net profit margin, notably increasing from 2023 to 2024. However, the revenue growth has been inconsistent, with a significant drop in 2024 compared to previous years. Despite this, EBIT margins have remained robust, indicating effective cost management. The absence of EBITDA data for 2024 affects a comprehensive margin analysis.

Balance Sheet

AFLAC maintains a solid balance sheet with no total debt in 2024, leading to a very strong debt-to-equity position. The company shows a high equity ratio, indicating financial stability and a strong buffer against liabilities. Return on equity has been strong, benefiting from high net income levels.

Cash Flow

The cash flow situation is healthy, with a significant increase in operating cash flow in 2024. The free cash flow has also grown substantially, reflecting efficient cash management. The company exhibits a strong operating cash flow to net income ratio, suggesting effective conversion of income into cash. However, fluctuations in financing cash flows indicate potential volatility in cash management strategies.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
19.13B	18.84B	19.15B	21.55B	22.26B
	Gross Profit
19.13B	18.84B	19.15B	21.55B	22.26B
	EBIT
6.42B	5.26B	4.87B	5.21B	4.16B
	EBITDA
6.42B	5.26B	4.87B	5.21B	4.16B
	Net Income Common Stockholders
5.44B	4.66B	4.42B	4.23B	4.78B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
4.02B	28.22B	79.68B	103.75B	111.02B
	Total Assets
117.57B	126.72B	131.74B	157.54B	165.09B
	Total Debt
7.50B	7.36B	7.44B	7.96B	7.90B
	Net Debt
1.27B	3.06B	3.50B	2.90B	2.76B
	Total Liabilities
91.47B	104.74B	111.60B	7.96B	7.90B
	Stockholders Equity
26.10B	21.98B	20.14B	33.25B	33.56B
Cash Flow		Free Cash Flow
2.71B	3.19B	3.88B	5.05B	5.96B
	Operating Cash Flow
2.71B	3.19B	3.88B	5.05B	5.96B
	Investing Cash Flow
2.78B	817.00M	-1.54B	-2.38B	-4.62B
	Financing Cash Flow
-3.49B	-3.72B	-3.55B	-2.74B	-1.11B

AFLAC Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 101.98
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

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 101.98 is below the 20-day moving average (MA) of 108.56, below the 50-day MA of 106.79, and below the 200-day MA of 104.18, indicating a bearish trend. The MACD of 1.42 indicates Negative momentum. The RSI at 66.12 is Neutral, neither overbought nor oversold. The STOCH value of 83.30 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for AFL.

AFLAC Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
GL	77 Outperform	$9.76B	9.82	21.87%	0.82%	6.07%	17.69%
UNM	75 Outperform	$12.58B	7.52	17.26%	2.28%	4.03%	45.42%
AFL	74 Outperform	$55.66B	10.59	22.64%	2.04%	1.21%	24.08%
LNC	67 Neutral	$5.11B	1.63	43.24%	6.01%	47.95%	―
MET	65 Neutral	$47.05B	11.62	15.41%	3.16%	6.10%	225.22%
Sector *	63 Neutral	$12.86B	9.19	9.16%	4.78%	16.31%	-8.97%
PRU	61 Neutral	$34.17B	12.87	9.79%	5.44%	34.25%	11.22%

AFLAC Corporate Events

Aflac Faces Q3 Losses Amid Strategic Adjustments

Aflac Incorporated experienced a challenging third quarter with net losses of $93 million due to foreign exchange-related issues, despite a 10.6% increase in adjusted earnings. Aflac Japan saw a 10.5% decline in net earned premiums, while Aflac U.S. reported a 2.8% rise, driven by improved sales. The company has focused on introducing new products in both markets, aiming to create long-term value for shareholders. Aflac also announced a $0.50 per share dividend and repurchased $500 million of its common shares.