Deutsche Bank Upgrades AFLAC (AFL) to Buy On Valuation

Deutsche Bank upgraded AFLAC (NYSE: AFL) from Hold to Buy with a $60 price target, citing valuation after recent sell-off.

The firm states, "Aflac's stock is down 10% YTD vs 0% for the life group and up 2% for the S&P 500. This includes a 9% decline over the past three trading days (reflecting a $2.3 bn loss of market cap). Aflac’s strong and steady capital generation ($2.5 bn annual stat op income) should help to offset potential losses from Japan and the investment portfolio. The P/E multiple at 8x (vs 5-yr avg of 13x and 10-yr avg of 16x) presents an attractive risk-reward opportunity, in our view."

The firm estimates life insurance claims from the Japanese earthquake and tsunami (ex-potential radiation effects) would be less than $10 mm for Aflac, assuming 20,000 deaths and Aflac having a 0.9% market share.

For more ratings news on AFLAC click here and for the rating history of AFLAC click here.

Shares of AFLAC closed at $50.89 yesterday.

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