Is Aflac Incorporated (AFL) overvalued?
On Equity Rank's model estimate, AFL trades 17% above its fair value. Aflac Incorporated (AFL) last closed at $124.06; the multi-method model fair value is $105.83.
| Price | Model fair value | Price vs model |
|---|---|---|
| $124.06 | $105.83 | 17% above |
What the answer rests on
- 2 of 12 valuation methods put AFL's value above its price and 10 put it below, so the methods mostly agree.
- To justify today's price, AFL's free cash flow would need to grow about 4.5% a year for ten years (a reverse discounted cash flow). Over the last three years it actually grew -13.0% a year.
- AFL trades at 13.5 times its last year's earnings, against a median of 13.0 for 75 profitable Insurance companies.
- Over the past year the price sat below the model fair value on 21% of trading days. The gap ranged from 3% below to 22% above the model fair value.
Read this before relying on it
The model fair value is an estimate from published financial statements. It is not a forecast of where the price goes, and it can be wrong. Within 10% either side we call it close to fair value: valuation models are not precise enough to read more into a smaller gap. Our own lists have no proven edge over the market yet; the live record shows every result, misses included.
Every valuation method behind AFL's fair value · What prices assume · Other companies