AFL US S&P 500Russell 1000 Earnings call · transcribed from the recording
Aflac (AFL) · Q3 2026 results and valuation
Share price: $127.11 · 2026-11-11
Results Q3 2026 vs Q2 2026 · previous quarter · published 4 Nov 2026 and 7 Aug 2026
Net income down 63.3% on the previous quarter. Management sounded about as positive as a typical company call, in its script and in answers to analysts.
Only a basic analysis is available for this company at the moment.
1 · Numbers
−63.3%
Net income vs Q2 2026
Outlook given
Net income 303.0M vs 825.0M
Revenue −20.5%
Against the same quarter last year (Q3 2025) it is −81.5%, so it is not just seasonal.
2 · How management spoke
Typical
Less upbeat than 62% of company calls
Answers to analysts: typical, in line with the script.
Similar to last call.
3 · What stood out
Guidance
Aflac expects the expense ratio to be on the lower end of the 20% to 23% range.
Valuation
Is Aflac undervalued?
Reverse DCF on net income from the last full fiscal year (no meaningful free cash flow: a bank, insurer or a year of negative cash flow) (2025-12-31), grown for 10 years, discounted back, plus a terminal value. “Implied growth” is the rate the current price assumes.
At −3.6% growth a year (3-year revenue growth), the model's fair value is $64.48 a share — the stock trades 97% above it. Today's price assumes 5.9% growth a year.
Current price
$127.11
close of 2026-11-11
Market implies growth of iThe yearly free-cash-flow growth, for the next 10 years, that today’s share price already assumes. If you believe the company grows faster than this, the stock is cheap under this model; slower, and it is expensive.
+5.9% for 10 yrs
Fair value / share
$64.48
Buy below
$48.36
Price vs fair value
Overvalued 97%
Price vs buy-below price
Overvalued 163%
Read between the lines
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Key theme
For the quarter, adjusted net investment income in yen terms increased 3.7 percent, primarily driven by higher fixed rate income…
Source quote
“For the quarter, adjusted net investment income in yen terms increased 3.7 percent, primarily driven by higher fixed rate income... Third quarter cybersecurity expenses and enhancements increased the expense ratio by approximately 180 basis points. dollar denominated assets from the weakening yen, offset by lower floating rate income and higher expenses.”
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Guidance
At the same time, Aflac expects pre-tax profit margin for 2026 in the U.S.
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Figure
Combining share repurchase and dividend, Aflac delivered $1.1 billion back to the shareholders in the third quarter and $3.7 billion...
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Fading
The adjusted ROE was 12.7% and 16.6%, excluding foreign currency remeasurement, a solid spread to Aflac's cost of capital.
Source quote
“The adjusted ROE was 12.7% and 16.6%, excluding foreign currency remeasurement, a solid spread to our cost of capital. Adjusted book value per share, excluding foreign currency remeasurement, decreased 4.1%. Overall, we view these results in the quarter as solid.”
Tone
How upbeat the language was, compared with other companiesiTone counts positive minus negative finance words, adjusted for length. Executives mostly speak positively, so the labels compare each call with every company's latest call: “typical” is the middle third, “very upbeat” the top tenth, “cautious” the bottom tenth.. Dot: Q3 2026. Ring: Q2 2026.
Script and answers carried a similar tone, so the script's message held up under questioning.
Sentences that drove the tone
“These earnings results were impacted by higher total adjusted expenses as well as lower adjusted net investment income from the reduced short-term asset balances and lower amortized hedge income.”
“Virgil and I agree that the strength of the leadership bench is a testament to the strong foundation created by Charles and Kouide-san, whose leadership has had a tremendous positive...”
“The ongoing foundational strengths of our business and our capacity for continued growth support our leading position and build on the momentum.”
Full figures
USD · SEC EDGAR XBRL (10-Q, period end 2026-09-30)
| Metric | Q3 2026period end 2026-09-30 | Q2 2026period end 2026-06-30 | Change | Q3 2025 | YoY |
|---|---|---|---|---|---|
| Revenue | 3.27B | 4.12B | −20.5% | 4.74B | −31.0% |
| Operating income | 500.0M | 995.0M | −49.7% | 1.99B | −74.9% |
| Net income | 303.0M | 825.0M | −63.3% | 1.64B | −81.5% |
| EPS | 0.61 | 1.63 | −62.6% | 3.08 | −80.2% |
| P/E today 18.1 | 16.3 | 12.6 | +3.7 | 14.7 | +1.6 |
Topics
Most discussed now
- Third quarter results included $40 million or 6 cents per diluted share of cybersecurity expenses and enhancements in...
- Starting with Aflac's Japan segment, net earned premiums in yen terms for the quarter declined 2%.
- The pre-tax margin for Japan in the quarter was 44.4%, down 780 basis points year-over-year, reflecting the very significant actuarial...
- This will allow us to continue to reduce risk, improve balance sheet efficiency, and ultimately generate a higher ROE for...
- It offers extremely attractive new business IRRs and the V &B on this business is very attractive especially post reinsurance...
Faded since Q2 2026
- Fading Segment was solid with a pretax margin of 20.9%, a 160 basis point decrease compared with a strong quarter a...
- Fading Persistency remains solid and in line with Aflac's expectations at 92.7%.
- Fading Aflac has seen less lapsation of older policies, and older policies obviously that have been on its books for a...
Latest announcements
Official filings, newest first.
- Results of operations; Regulation FD disclosure · SEC 8-K
- Results of operations; Regulation FD disclosure · SEC 8-K
- Other events · SEC 8-K
- Other events · SEC 8-K
- Other events · SEC 8-K
- Shareholder vote results · SEC 8-K · routine
- Results of operations; Regulation FD disclosure · SEC 8-K
- Results of operations; Regulation FD disclosure · SEC 8-K