Aflac loses Buy rating at Credit Suisse

The team cites headwinds to Japan earnings repatriation and valuation. Aflac's (AFL) price target, however, is boosted to $67 from $66.

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Comments (3)
  • Exquisite Decay
    , contributor
    Comments (289) | Send Message
    '...Japan earnings repatriation...' I thought Aflac rarely brings its cash from Japan to the US. Aflac has little motivation to do so at this time. No credit to Suisse if its team does not know this company's history better.
    6 Jan 2014, 10:01 AM Reply Like
  • positivethoughts
    , contributor
    Comments (2065) | Send Message
    Yes. Deficits do matter. If they didnt, why would governments ever have budgets?


    I can always tell when an 'academic' is making an argument in favour of 'internally held debt' because they will use the same, wrong and tired argument that Japan's debt is held by Japanese, so therefore, magically, 'it doesnt matter'.


    Those defending Japan's position claim that paying someone back with a devalued currency isnt a problem and that Japanese citizens will continue to buy JGBs forever. Well, when these Japanese savers retire, are they going to be withdrawing money and so selling JGB's or do you think they will not be withdrawing and still buying JGBs? Obviously, they will be sellers.


    When young people have to buy a greater value of JGB's to cover the total amount which the old people are withdrawing, there will be a problem. Moreover, Japan's population is aging and will likely not turn to immigration to rebalance the ratio of young workers versus old retirees. As I have warned before, Japan hates foreigners and has a very anti-immigration mindset. They only allow a very minute percentage of non-Japanese to stay within their borders. When you subtract foreigners teaching English to the Japanese, and furthermore, when you subtract Koreans who were brought to Japan and grew up here as an aftermath of WW2, the net immigrant population of Japan is less than 1%.


    So, the young people will be forced to buy enough JGBs to fund all government services for themselves and will have to pay fo the elderly's services, plus these same young people will have to fund all the elderly's JGB redemptions. Well, how is there going to be enough money to meet such requirements? And if this money doesnt come from production and savings, but comes from an increase in the money supply, what is going to happen to prices? When prices start to inflate, what happens to the quality of life of all those savers, and all those young people, going forward.


    6 Jan 2014, 10:06 AM Reply Like
  • Balanced Investor
    , contributor
    Comments (14) | Send Message
    Tongue-in-cheek CreditSuisse. Alot of positives in the downgrade, including a price target raise! Abenomics will continues to weaken the yen and strengthen the Japanese domestic economic indicators, leading to better sales/revenue for AFL. Buy AFL on any weakness. It is a proven dividend grower, committed to its shareholders.
    6 Jan 2014, 12:15 PM Reply Like
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