Sandler O’Neill on AFL

This week, Sandler O’Neill upgraded AFLAC (AFL). Here’s some of what they had to say:

We are upgrading shares of the provider of mostly supplemental health and life insurance, primarily in Japan and the U.S., to a Buy rating from a Hold. We’ve done this for four reasons. 1) With the company’s Japan-branch conversion and reorganization completed, second-quarter 2018’s earnings results revealed that there was considerable pent-up Japanese agent demand for Japanese products, which is now being taken into account. 2) It appears that the company has finally cracked the mystery of getting U.S. distribution of its Japanese products. 3) It has also become a beat-and-raise story with the shift in its products into third sector from first sector, which in Japan allows the sale of a wider range of insurance products under one company name. 4) While Aflac is often described as a life insurance company when it’s compared with other insurers, it will be more attractive to investors if it clearly presents the wider range of its products.

Our target price stands at $52.

Posted by on August 5th, 2018 at 9:04 am


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