Sterne Agee Sees Troubles for Aflac in Japan (AFL)
Analysts at Sterne Agee have downgraded US and Japan health and life insurance company Aflac Incorporated (AFL) to “Neutral” on Tuesday due to near-term headwinds in Japan.
The analysts downgraded AFL from “Buy” to “Neutral” and sees shares reaching $62, down from the previous target of $63. The new target suggests a +17% upside to Monday’s closing price of $52.95.
A Sterne Agee analyst commented, “We are downgrading AFL shares from Buy to Neutral as the recent significant weakening of the Yen vs. the Dollar will negatively impact EPS revisions as well as capital repatriation from the Japan branch. Further, despite the positive influence of the company’s new portfolio allocation strategy, we believe downside risk to Japan margins remains somewhat high. We believe the combination of these risks will ultimately present investors with a better buying opportunity.”
Aflac shares were flat during premarket trading on Tuesday. The stock is up +22.63% over the past year.
The Bottom Line
Shares of Aflac (AFL) have a 2.64% dividend yield, based on last night’s closing stock price of $52.95. 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 Dividend.com DARS™ Rating of 3.3 out of 5 stars.
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