Yahoo Finance Aflac Incorporated Just Beat EPS By 98%: Here's What Analysts Think Will Happen Next
A week ago, Aflac Incorporated (NYSE:AFL) came out with a strong set of quarterly numbers that could potentially lead to a re-rate of the stock. Aflac delivered a significant beat to revenue and earnings per share (EPS) expectations, hitting US$5.1b-19% above indicated-andUS$3.10-98% above forecasts- respectively This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.
Check out our latest analysis for Aflac
Taking into account the latest results, the seven analysts covering Aflac provided consensus estimates of US$18.1b revenue in 2024, which would reflect a discernible 6.5% decline over the past 12 months. Statutory earnings per share are expected to descend 12% to US$8.62 in the same period. Before this earnings report, the analysts had been forecasting revenues of US$17.3b and earnings per share (EPS) of US$8.01 in 2024. It looks like there's been a modest increase in sentiment following the latest results, withthe analysts becoming a bit more optimistic in their predictions for both revenues and earnings.
Despite these upgrades,the analysts have not made any major changes to their price target of US$90.00, suggesting that the higher estimates are not likely to have a long term impact on what the stock is worth. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. The most optimistic Aflac analyst has a price target of US$114 per share, while the most pessimistic values it at US$77.00. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.
Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. Over the past five years, revenues have declined around 3.8% annually. Worse, forecasts are essentially predicting the decline to accelerate, with the estimate for an annualised 13% decline in revenue until the end of 2024. Compare this against analyst estimates for companies in the broader industry, which suggest that revenues (in aggregate) are expected to grow 5.1% annually. So it's pretty clear that, while it does have declining revenues, the analysts also expect Aflac to suffer worse than the wider industry.
The Bottom Line
The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Aflac's earnings potential next year. They also upgraded their revenue estimates for next year, even though it is expected to grow slower than the wider industry. The consensus price target held steady at US$90.00, with the latest estimates not enough to have an impact on their price targets.
With that in mind, we wouldn't be too quick to come to a conclusion on Aflac. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for Aflac going out to 2026, and you can see them free on our platform here..
You still need to take note of risks, for example - Aflac has 1 warning sign we think you should be aware of.
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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.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com
