Barclays analyst Alex Scott initiated coverage of Aflac with an Underweight rating and $96 price target. The firm initiated the North America life insurers with a positive industry view. Its top ideas include Metlife (MET), Equitable Holdings (EQH) and Unum Group (UNM), and its Underweights are Aflac (AFL), Great West Lifeco (GWLIF) and Principal Financial Group (PFG). The firm recommends selectively investing in spread-product underwriters with strong cash generation, excess capital, growth opportunities, and contained credit risk. Group benefits should continue to be a source of strength for earnings and growth, the analyst tells investors in a research note. Barclays’ less optimistic view of 401k defined benefit businesses is “underpinned by the fierce competition” for assets and overall industry outflows due to elevated levels of age 65 retirees over the next several years.
