Aflac Incorporated Price and EPS Surprise

Aflac Incorporated price-eps-surprise | Aflac Incorporated Quote

Q4 Earnings Whispers for AFL

Our proven model does not conclusively predict an earnings beat for Aflac this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. That is not the case here, as you will see below.

Earnings ESP: Aflac has an Earnings ESP of -1.54% because the Most Accurate Estimate of $1.60 per share is pegged lower than the Zacks Consensus Estimate of $1.63. You can uncover the best stocks before they’re reported with our Earnings ESP Filter.

Zacks Rank: AFL currently carries a Zacks Rank of 3.

Factors to Note Ahead of AFL’s Results

Aflac’s revenue growth is anticipated to have been supported by strong contributions from its U.S. operations. This segment is expected to have been bolstered by an increase in net earned premiums and higher-yielding fixed-income investments. Premiums are likely to have gained on improved sales of Group Life Absent Management and Disability and individual voluntary benefits.

The Zacks Consensus Estimate for net earned premiums for Aflac’s U.S. segment is pegged at $1.5 billion, indicating a 5.4% increase from the prior-year quarter’s figure. Additionally, the consensus mark for adjusted net investment income for the unit is pegged at $216.9 million, indicating 2.8% growth from the year-ago quarter’s number. 

Furthermore, expense ratios in both segments are expected to have improved due to prudent expense management efforts. In addition,, expense allowances from reinsurance agreements are likely to have boosted Aflac’s margins.

On the other hand, Aflac’s Japan segment is expected to have suffered challenges due to a decline in net earned premiums. This drop is likely to have been due to a deterioration in paid-up policies. Nevertheless, solid persistency rates are likely to have provided an impetus to the segment’s quarterly results. The Zacks Consensus Estimate for net earned premiums of the unit is pegged at $1.8 billion, indicating a 3.3% decrease from the prior-year quarter’s figure, making an earnings beat uncertain.

The consensus estimate for Aflac’s consolidated net earned premiums is pegged at $3.4 billion, indicating a slight increase from the prior-year quarter’s figure. The consensus estimate for total net investment income is $963 million, indicating 11.3% growth year over year.

Stocks That Warrant a Look

While an earnings beat looks uncertain for Aflac, here are some other companies worth considering from the broader finance space, as our model shows that these have the right combination of elements to post an earnings beat this time around:

Kinsale Capital Group, Inc. KNSL has an Earnings ESP of +1.06% and a Zacks Rank of 3. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Kinsale Capital’s bottom line for the to-be-reported quarter is pegged at $4.34 per share, implying year-over-year growth of 12.1%. KNSL beat earnings estimates in each of the past four quarters, with an average surprise of 9.4%.

Rithm Capital Corp. RITM has an Earnings ESP of +2.22% and is a Zacks #2 Ranked player. The Zacks Consensus Estimate for Rithm Capital’s bottom line for the to-be-reported quarter is pegged at 45 cents per share, which remained stable over the past month. The consensus estimate for RITM’s revenues is pegged at $1.23 billion, indicating 73.2% growth from a year ago.

Palomar Holdings, Inc. PLMR has an Earnings ESP of +0.27% and a Zacks Rank of 2.

The Zacks Consensus Estimate for Palomar’s bottom line for the to-be-reported quarter is pegged at $1.24 per share, which remained stable in the past month. PLMR beat earnings estimates in each of the past four quarters, with an average surprise of 14.9%.