Lehman Brothers upgraded AFLAC Inc. (AFL) shares to strong buy from buy.
Analyst Eric Berg says the upgrade follows a 10-day trip to Asia, where he held meetings with the company and its competitors. He notes that the meetings not only left him highly confident that the company understands its sales problem in Japan, but also thinks that the program the company has put together to solve its Japan problem will produce intended result: namely 5%-10% Japan sales growth in 2002. In Japan, the company has been experiencing lower sales of its Rider Max medical insurance product, its key cancer insurance product.
He sees EPS of $1.53 in 2002 and $1.74 in 2003. He raised his 1-year price target to $35 from $31. He ranks the company as the single best idea in the life insurance sector.