NEW YORK (
) -- Sandler O'Neill + Partners upgraded shares of
to buy from hold because a boost from the company's Japanese unit.
The upgrade -- as well as an increased price target to $63 to $54 -- are due to an increase in business that Aflac is expecting in the Japanese market, said managing director Paul Newsome. The report noted that Aflac in Japan is releasing several new products, including a cancer product for women and an updated Gentle EVER product. The company also has increased its distribution in Japan, primarily through its bank channel, which so far has contributed to over 10% of sales in 2010.
"We are adjusting our 2010 operating EPS estimate to $5.45 up from $5.44 to account for incremental strength in the Japan operations," wrote Newsome. "We are also increasing our 2011 estimate to $6.00 from $5.95 to account for strongerresults in the Japan segment. Consensus is currently $5.46 and $5.99 for 2010 and 2011, respectively."
Overall, Newsome wrote that he expects sales will be down 3% in 2010, but 2011 sales should grow by 3.3%.
--Written by Maria Woehr in New York.
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