Aflac Incorporated Beat Analyst Estimates: See What The Consensus Is Forecasting For This Year

As you might know, Aflac Incorporated (NYSE:AFL) just kicked off its latest first-quarter results with some very strong numbers. Statutory earnings performance was extremely strong, with revenue of US$5.4b beating expectations by 27% and earnings per share (EPS) of US$3.25, an impressive 111%ahead of expectations. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

See our latest analysis for Aflac

After the latest results, the consensus from Aflac's nine analysts is for revenues of US$17.6b in 2024, which would reflect a chunky 9.0% decline in revenue compared to the last year of performance. Statutory earnings per share are expected to fall 14% to US$8.13 in the same period. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$17.2b and earnings per share (EPS) of US$6.30 in 2024. So it seems there's been a definite increase in optimism about Aflac's future following the latest results, with a sizeable expansion in the earnings per share forecasts in particular.

Despite these upgrades,the analysts have not made any major changes to their price target of US$85.17, suggesting that the higher estimates are not likely to have a long term impact on what the stock is worth. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. The most optimistic Aflac analyst has a price target of US$95.00 per share, while the most pessimistic values it at US$77.00. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting Aflac is an easy business to forecast or the the analysts are all using similar assumptions.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. One more thing stood out to us about these estimates, and it's the idea that Aflac's decline is expected to accelerate, with revenues forecast to fall at an annualised rate of 12% to the end of 2024. This tops off a historical decline of 3.6% a year over the past five years. Compare this against analyst estimates for companies in the broader industry, which suggest that revenues (in aggregate) are expected to grow 6.0% annually. So while a broad number of companies are forecast to grow, unfortunately Aflac is expected to see its revenue affected worse than other companies in the industry.

The Bottom Line

The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Aflac following these results. Fortunately, they also upgraded their revenue estimates, although our data indicates it is expected to perform worse than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have estimates - from multiple Aflac analysts - going out to 2026, and you can see them free on our platform here.

And what about risks? Every company has them, and we've spotted 2 warning signs for Aflac (of which 1 shouldn't be ignored!) you should know about.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.