Bank of America Merrill Lynch Reports on Aflac

Bank of America Merrill Lynch commented on Aflac AFL in a report released today. In the report, Bank of America Merrill Lynch was positive in its assessment of the company. Bank of America Merrill Lynch writes, "We believe that Aflac will return to double digit EPS growth beyond 2012. Although growth will be pressured in the near term, Aflac's ability to generate strong cash should allow it to engage in significant buyback post its portfolio derisking. We estimate that moderate operating earnings growth combined with material capital management should allow AFL to achieve a long term EPS growth rate of 10%. Aflac's is currently only trading at 7.2X 2012E operating earnings despite a 25% ROE and our expectation for double digit long term EPS growth. This P/E is below other non-equity sensitive life names. For comparison, TMK and SFG currently trade at 8.5X and 8.2X 2012E earnings despite less favorable long-term fundamentals relative to AFL, in our view." Bank of America Merrill Lynch currently has a Buy rating on Aflac and a price objective of $75. Shares of Aflac closed at $48 on Friday, down $1.59 on the day.