Aflac Incorporated (AFL)
Valuation Overview•Is Aflac Incorporated Overvalued or Undervalued?
Trading at a discount to intrinsic cash flow value, implying pessimistic long-term market expectations.
Moderate quality score of 72/100, reflecting stable operating margins and manageable leverage.
Analysts remain cautious, with consensus price targets indicating limited room for upside expansion.
Verdict: Solid fundamental quality, though growth presents a headwind.
Wall Street is cautious, forecasting potential downside. This outlook is strongly supported by highly attractive capital returns, driven by a balanced mix of reliable dividends and share buybacks.
AFL exhibits elite business quality, driven by exceptional capital efficiency and highly lucrative margins. This is paired with a moderately leveraged but stable balance sheet.
The company is facing top-line contraction (-3.1% 3Y CAGR) however, earnings have severely contracted over the same period. This growth is supported by elite operational efficiency, sustaining an impressive 31.0% operating margin.
| Financial Metric | Trend (12Q) | Latest Qtr | 1Y Growth | 3Y CAGR | 5Y CAGR | 10Y CAGR |
|---|---|---|---|---|---|---|
| Revenue | $4.3B | -8.8% | -3.1% | -4.8% | -1.8% | |
| EBITDA | $1.3B | — | +4.2% | — | — | |
| Net Income | $1.0B | -33.0% | -6.2% | — | +3.7% | |
| EPS (Diluted) | $1.98 | -29.1% | -0.5% | +0.5% | +8.8% | |
| Free Cash Flow | $968.0M | -5.6% | -13.0% | -15.6% | — |
| Metric | TTM | 3Y Avg | 5Y Avg | 10Y Avg |
|---|---|---|---|---|
| Gross Margin | 47.8% | 58.2% | 74.9% | 87.5% |
| Operating Margin | 31.0% | 29.4% | 27.5% | 23.1% |
| Net Margin | 25.4% | 24.7% | 23.4% | 20.0% |
| FCF Margin | 16.1% | 15.2% | 17.9% | 22.3% |
| Quarter | EPS Est. | EPS Act. | Surprise | EPS | Rev |
|---|---|---|---|---|---|
| Q2'26Latest | $1.79 | $1.75 | -2.2% | ||
| Q1'26 | $1.69 | $1.57 | -7.1% | ||
| Q4'25 | $1.77 | $2.49 | +40.7% | ||
| Q3'25 | $1.70 | $1.78 | +4.7% | ||
| Q2'25 | $1.67 | $1.66 | -0.6% | ||
| Q1'25 | $1.62 | $1.56 | -3.7% | ||
| Q4'24 | $1.69 | $2.16 | +27.8% | ||
| Q3'24 | $1.60 | $1.83 | +14.4% |
Total return is +20.4% (1Y), lagging the benchmark by -5.5%
| Period | Total Return | vs S&P 500 (Alpha) | Dividend Contribution |
|---|---|---|---|
| YTD | +11.3% | +0.6% | — |
| 1Y | +20.4% | -5.5% | +2.3% |
| 3YCAGR | +22.5% | +3.7% | +9.1% |
| 5YCAGR | +19.1% | +8.0% | +17.6% |
| 10YCAGR | +14.4% | +0.3% | — |
The S&P 500 is at 31.4x trailing P/E — Expensive relative to historical averages.
Quick answers to common questions about Aflac Incorporated (AFL) valuation, health, and returns.
Aflac Incorporated is estimated to be undervalued under our discounted cash flow framework. relative multiples indicate the stock is Fair versus peers compared to industry peers. undervalued (implying +42.0% upside to DCF intrinsic value of $171.59)
Aflac Incorporated has multiple valuation anchors: DCF Intrinsic Value: $171.59 | Peer Relative Fair Value: $125.22 | Wall Street Analyst Target: $114.40 (implying -5.8% upside). A convergence of these signals offers higher conviction.
Aflac Incorporated displays good financial health with a composite quality score of 72/100, supported by a Piotroski F-Score of 5/9, Return on Invested Capital (ROIC) of 11.8%.
Aflac Incorporated pays a 1.9% dividend yield, covered by a 33% payout ratio with 42 years of growth, supplemented by a 5.7% buyback yield.
Aflac Incorporated's current growth trajectory is Decelerating. The company achieved -8.8% 1Y revenue growth and -29.1% 1Y EPS growth, compared to its 3Y revenue CAGR of -3.1%.
Wall Street consensus is Hold based on 32 analysts, beating EPS expectations in 58% of recent quarters with a -2-quarter streak. The consensus price target represents a -5.8% change from current levels.
Investment risks for Aflac Incorporated include: -9.6% 1-year max drawdown. Volatility risk is characterized by a beta of -0.04x.
No. These computations are purely quantitative model outputs for informational purposes. They do not account for qualitative management shifts or macro events. Always consult a licensed RIA before buying or selling shares.
Disclaimer: This page is for informational purposes only and does not constitute financial advice. All valuation models, scores, and target estimates are automated computations under stated assumptions and should not be relied upon as the sole basis for any investment decision.