It's shaping up to be a tough period for Aflac Incorporated (NYSE:AFL), which a week ago released some disappointing first-quarter results that could have a notable impact on how the market views the stock. The analysts look to have been far too optimistic in the lead-up to these results, with revenues of (US$3.4b) coming in 20% below what they had expected. Statutory earnings per share of US$0.05 fell 97% short. 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. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.
Taking into account the latest results, Aflac's seven analysts currently expect revenues in 2025 to be US$17.2b, approximately in line with the last 12 months. Statutory earnings per share are expected to drop 10% to US$5.93 in the same period. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$17.3b and earnings per share (EPS) of US$6.72 in 2025. So there's definitely been a decline in sentiment after the latest results, noting the substantial drop in new EPS forecasts.
View our latest analysis for Aflac
It might be a surprise to learn that the consensus price target was broadly unchanged at US$105, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. 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. Currently, the most bullish analyst values Aflac at US$120 per share, while the most bearish prices it at US$94.00. With such a narrow range of valuations, the analysts apparently share similar views on what they think the business is worth.
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. For example, we noticed that Aflac's rate of growth is expected to accelerate meaningfully, with revenues forecast to exhibit 2.5% growth to the end of 2025 on an annualised basis. That is well above its historical decline of 5.2% a year over the past five years. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to grow 5.2% annually for the foreseeable future. Although Aflac's revenues are expected to improve, it seems that the analysts are still bearish on the business, forecasting it to grow slower than the broader industry.
The Bottom Line
The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Aflac. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will 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.
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. We have forecasts for Aflac going out to 2027, and you can see them free on our platform here.
And what about risks? Every company has them, and we've spotted 1 warning sign for Aflac 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.