AFL
Aflac Incorporated$111.29
Sell
Target $69.36
Report: Mar 09, 2026Financial Services • Insurance - Life • Mature CompounderSnapshot
Decision-first overview with recommendation, valuation anchor, and current setup.
Company Overview
Research Snapshot
Price History
Pelican View
Current$111.29-37.7%
Rec: SellConviction: High
Entry Target
N/A
N/A
Fair Value
$69.36
(38% below current)
Stop Loss
N/A
N/A
Position Size
None
Time Horizon
N/A
Key Metrics
Live Snapshot
Market Data
52 Week High$119.32
52 Week Low$96.95
Avg. 3 Month Volume2.39M
Efficiency
LTM Gross Margin57.5%
LTM EBITDA Margin27.7%
LTM EBIT Margin27.7%
LTM Operating Margin27.7%
LTM ROA3.0%
LTM ROE13.1%
LTM ROIC3.9%
LTM ROCE4.0%
Capital Structure
Market Cap (MM)$56.7B
Enterprise Value (MM)$58.8B
Shares Outstanding520.25M
Total Debt (MM)$8.41B
Cash & Equivalents (MM)$6.25B
LTM Net Debt (MM)$2.16B
LTM Net Debt/EBITDA0.5x
Growth
TTM Rev. Growth-9.3%
Last 3-Yr Rev. CAGR-4.2%
Last 3-Yr EBITDA CAGR-0.5%
Last 3-Yr EPS CAGR1.2%
Valuation
Street Target Price$113.83
LTM EV/Revenue3.4x
LTM EV/Gross Profit6.0x
LTM EV/EBIT12.4x
LTM EV/EBITDA12.4x
LTM P/E15.5x
LTM EV/FCF23.0x
LTM P/FCF22.2x
LTM P/TB0.5x
LTM P/B1.9x
Dividend Yield2.1%
Payout Ratio34.2%
Executive SummarySituation: Current price is $111.29 versus fair value $69.36 (-37.7% expected return), and valuation confidence is stable. Debate: Bull case depends on Realization of Japan Premium Decline: Management has guided for a 1-2% decline in Japan's underlying earned premiums for 2026. Bear case centers on Moat Erosion in Japan: The primary risk is a permanent impairment of the Japan segment's pricing power due to demographic declines and increased competition from low-cost providers, which would lead to the bear case scenario. Conclusion: Recommendation is Sell with no position, pending a materially better risk/reward setup.
Bull Case
Proponents argue that Aflac's 'Very Strong' capital buffers and 8.2% net buyback yield provide a massive margin of safety. They point to the 15.7% sales growth in Japan driven by the Miraito product as evidence of a successful product-led turnaround.
Bear Case
The bear case centers on the 9.3% revenue decline and the 7.2 percentage point compression in operating margins. Skeptics argue that earnings quality is low, as it relies on recurring reserve remeasurement gains to offset underlying underwriting losses and a 33% drop in net income.
Key Catalysts
Near-Term (0-6 months)Impact: High
Realization of Japan Premium Decline: Management has guided for a 1-2% decline in Japan's underlying earned premiums for 2026. As this manif...
Mid-Term (6-18 months)Impact: Moderate
Cyber Breach Litigation Outcomes: The Graham v. Aflac class-action lawsuit regarding the 2025 cyberattack could lead to significant settleme...
Long-Term (18+ months)Impact: Moderate
Aflac is relevant for analysis at this moment because it is trading near its 52-week high of $119.32 despite a 9.3% revenue contraction and...
Primary Risks
Concern: High
Moat Erosion in Japan: The primary risk is a permanent impairment of the Japan segment's pricing power due to demographic declines and incre...
Concern: Medium
The bear case is defined by moat erosion and declining profitability, with revenue falling 5% and margins dropping to 24%. The final Bear Ca...
Concern: Medium
The stewardship verdict is 'Adequate but Cautious.' While the board is highly qualified with 91% financial expertise, the lack of insider bu...
Recent Activity
2025-04-04Market Movement
-8.74%Market/Sector Move -8.74%
2024-08-01SEC Filing (8-K)
+6.57%Aflac Incorporated reports Q2 2024 earnings with net income of $1.8 billion
2024-02-01SEC Filing (8-K)
-9.65%Aflac reports Q4 2023 earnings with solid performance and 19% dividend increase
2023-08-02SEC Filing (8-K)
+5.73%Aflac reports Q2 2023 earnings with strong performance despite currency headwinds
2023-04-27SEC Filing (8-K)
+6.24%Aflac Incorporated reports Q1 2023 earnings with net income of $1.2 billion
Valuation Table
9.8/10Decision Grade
Scenario Range
$63
Bear
$81
Base
$98
Bull
$111