Shares of Aflac Inc. climbed modestly Monday after Credit Suisse upgraded the insurer to "Outperform" from "Neutral."
Analyst Thomas Gallagher also raised his price target on the stock to $60 from $52. He cited the supplemental insurance provider's ability to offset potential credit losses and an improving outlook for its worldwide investments, including hybrid securities, which combine features of debt and equity.
Aflac has raised its reserves for covering possible credit losses, he said. Its investment holdings are still an issue, however, and Aflac holds a high level of unrealized losses relative to shareholder equity, he said.
The company likely still has material losses ahead, while most of the industry has put theirs behind them, Gallagher wrote. Because investment income is a lower portion of earnings and revenue, this should be less of an issue for Aflac than some of its peers.
The analyst said it appears that Aflac can reach its target for earnings-per-share growth by a percentage in the low double digits.
In afternoon trading, Aflac shares gained $1.69, or 3.9 percent, to $45.34.