AFL reports Q1 results April 29 with options positioning running considerably more cautious than recent norms. The put/call ratio hit 0.52 this week, well above its 20-day average of 0.34. That's nearly two standard deviations above the mean. Short interest climbed 3% over the past week to 1.6% of float. Borrow costs remain minimal at 0.32% despite the uptick in short shares. The stock rose 8% over the past month to close at $114.62, though it slipped 0.4% Friday. Peers sold off harder on the week — HIG dropped nearly 4%, THG fell 2.4% — while Aflac stayed flat.
Analyst activity has turned more selective in recent weeks. Mizuho cut its target from $107 to $102 mid-April while holding Underperform, a sign that even the bears see less downside than before. Wells Fargo trimmed to $116 from $118, keeping Equal-Weight. UBS lowered to $114 from $116 on a Neutral stance. The consensus target sits at $111.86, modestly below the current price. The pullbacks aren't dramatic — most firms are shaving a few dollars rather than slashing — but the direction is clear. Bulls point to the company's consistent ability to beat estimates; its EPS surprise factor ranks in the 88th percentile. The dividend score is equally strong at the 91st percentile, reflecting a reliable payout history. Bears focus on valuation after the recent run — the stock trades at 15.5 times earnings, up from the low 14s a month ago, and the price-to-book ratio climbed to 1.95. The P/E multiple has expanded faster than fundamentals would suggest.
Japan Post Holdings, Aflac's second-largest shareholder with 10% of shares, sold roughly $35 million worth of stock over the past two weeks. The sales were small relative to the position but consistent. The broader holder base stayed put — Vanguard added 6.8 million shares in Q1, BlackRock added 106,000. After the last four earnings events, the stock rose an average of 4% on the day, then gave back roughly half the gain over the following five days. That pattern suggests initial relief followed by profit-taking.
The print will test whether Aflac can show margin improvement in its core Japan operations while the yen remains volatile and whether U.S. growth can offset any pressure overseas. The options market is pricing more caution than usual, and the Street has tempered expectations after the stock's recent climb.
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