Deutsche Bank Begins Coverage of Aflac (AFL)

Deutsche Bank Begins Coverage of Aflac (AFL)


Deutsche Bank reported on Wednesday that they have initiated coverage of insurance company, AFLAC Incorporated(AFL).

The firm has begun coverage of AFL with a “Hold” rating and $56 price target. This price target suggests a 6% increase from the stock’s current price of $52.44.

An analyst from the firm commented, “in recent years, Aflac has reacted to market forces by partnering with banks in Japan to sell products with an asset accumulation perspective, and by working with U.S. brokers to sell group and other supplemental products. While the transitions to new distribution channels and new products have created opportunities to grow the top line, the investments and shifting business mix have resulted in margin compression.
With the derisking of the investment portfolio nearly complete, management has now turned its focus in Japan to improve yields on new money. This, along with pricing action taken on the WAYS product, should result in margin improvement starting in 2013.”

The firm has estimated FY2012, FY2013, and FY2014 to see EPS of $6.55, $6.90 and $7.40.

AFLAC shares were down 37 cents, or -0.71% during premarket trading Wednesday. The stock has increased 18.5% in the past year.

The Bottom Line
Shares of Aflac (AFL) have a 2.67% dividend yield, based on last night’s closing stock price of $52.44. The stock has technical support in the $48-$50 price area. If the shares can firm up, we see overhead resistance around the $54-$55 price levels.

AFLAC Incorporated(AFL) is not recommended at this time, holding a DARS™ Rating of 3.3 out of 5 stars.

Be sure to visit our complete recommended list of the Best Dividend Stocks, as well as a detailed explanation of our ratings system here.

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