Citi Raises Aflac Estimates Going Into Earnings

Citi maintains its Buy rating and $60 target on Aflac AFL, but has raised its 2010E/12E to $5.55, $6.20 and $6.85, respectively, to reflect the weakening of the dollar as it now assumes a ¥/$ exchange rate of 85. On a nominal basis our forecasts are largely unchanged. Near-term the troubled $69.5B investment portfolio in Japan with its above-average exposure to hybrid preferred securities and European financials remains a valuation risk and will likely see the write-down of approx. $1B of Greek bank debt by YE10. AFL will report 3Q10 on Oct. 26, with the earnings call at 10am the following morning. AFL closed Friday at $55.46