Here's Why Investors Should Retain Aflac Incorporated Stock for Now

Aflac Incorporated AFL is well-poised for growth, driven by strong U.S. business, product launches, acquisitions, partnerships, stronger underwriting discipline and effective cost management. The company operates through two reportable segments: Aflac U.S. and Aflac Japan. In the past six months, shares of AFL have grown 4.7%, outperforming the industry’s 2.8% rise. Aflac — with a market capitalization of $58.1 billion — offers supplemental health and life insurance products in Japan and the United States.

Courtesy of solid prospects, this Zacks Rank #3 (Hold) stock is worth retaining at the moment.

Where Do Estimates for AFL Stand?

The Zacks Consensus Estimate for AFL’s 2025 earnings is pegged at $7.53 per share, indicating a 4.4% year-over-year rise. In the past 60 days, it has witnessed five upward estimate revisions against none in the opposite direction. Furthermore, the consensus mark for revenues is pegged at $17.8 billion for 2025. AFL beat earnings estimates in two of the past four quarters and missed twice, with an average surprise of 9.4%.

Aflac Incorporated Price, Consensus and EPS Surprise

Aflac Incorporated price-consensus-eps-surprise-chart | Aflac Incorporated Quote

AFL’s Growth Drivers

Aflac's revenues are bolstered by strong sales in its U.S. and Japan segments, driven by strategic growth investments, robust persistency rates and enhanced productivity. The company’s new annualized premium sales in the Japan segment witnessed 16.1% year-over-year growth on a yen basis in the first nine months of 2025 on the back of solid sales of Miraito, its cancer insurance product and Tsumitasu. Aflac Japan is expanding digital sales through smart device-based applications and virtual sales tools, enabling online consultations and end-to-end policy completion for a more efficient customer experience.

Aflac U.S.’ new annualized premium sales rose 3% year over year in the first nine months of 2025, with group products playing a key role in supporting the momentum. Product innovation, virtual channel growth and agent recruitment are expected to sustain momentum and reinforce its competitive positioning.

Aflac has been boosting its core insurance growth by making strategic acquisitions and forming partnerships that help expand its capabilities and reach. Through investments in asset management and benefit services, along with collaborations that enhance digital distribution and administrative support, the company is strengthening its product ecosystem while creating additional avenues for long-term earnings growth beyond traditional underwriting.

AFL maintains a strong financial position and concluded third-quarter 2025 with $6.8 billion in cash and cash equivalents, up from $6.2 billion at 2024-end, and maintains a strong times-interest-earned ratio of 25.39X versus the industry’s 20.02X. Shareholder rewards remain a priority for the company. In the first nine months of 2025, Aflac repurchased 25.7 million shares worth $2.7 billion.

AFL’s Key Risks

There are some factors, however, that investors should keep a careful eye on.

Operating cash flow continues to trend downward, falling 23.2% in 2022, 17.8% in 2023, 15.1% in 2024 and 4.6% in the first nine months of 2025. This ongoing trend could limit the company’s flexibility to pursue growth investments. Aflac’s shares trade at a forward P/E of 14.94X, above both its five-year median of 12.45X and the industry average of 12.44X. The elevated multiple suggests limited upside in the near term as investors may hesitate to extend further premium valuations amid uneven earnings recovery.

Key Picks

Some better-ranked stocks in the broader finance space are United Fire Group, Inc. UFCS, Heritage Insurance Holdings Inc. HRTG and Robinhood Markets, Inc. HOOD, each sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for United Fire Group’s current-year earnings of $3.93 per share has witnessed one upward revision in the past 60 days against none in the opposite direction. United Fire Group beat earnings estimates in each of the trailing four quarters, with the average surprise being 69.4%. The consensus estimate for current-year revenues is pegged at $1.4 billion, implying 10% year-over-year growth.

The Zacks Consensus Estimate for Heritage Insurance’s current-year earnings of $5.14 per share has witnessed two upward revisions in the past 60 days against no movement in the opposite direction. Heritage Insurance beat earnings estimates in each of the trailing four quarters, with the average surprise being 100.1%. The consensus estimate for current-year revenues is pegged at $844.6 million, calling for 3.4% year-over-year growth.

The Zacks Consensus Estimate for Robinhood Markets’ current-year earnings is pegged at $1.99 per share and has witnessed six upward revisions in the past 60 days against no movement in the opposite direction. Robinhood Markets beat earnings estimates in each of the trailing four quarters, with the average surprise being 25.8%. The consensus estimate for current-year revenues is pegged at $4.5 billion, calling for 51.9% year-over-year growth.

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This article originally published on Zacks Investment Research (zacks.com).

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