MMC

Growing Focus on Financial Wellness: Mercer’s survey indicates that defined contribution (DC) plan sponsors are prioritizing financial wellness (39%), regulatory compliance (37%), and cost reduction (36%) as they navigate increasing regulatory scrutiny and cost pressures.

Cost Management Strategies: Despite a majority expecting budget increases, 70% of employers are actively seeking to lower plan costs, with over half considering changes to plan design features to achieve this goal.

Implementation of AI in DC Plans: A significant 67% of plan sponsors are exploring or implementing AI and advanced analytics to enhance investment management and participant experiences, with 44% believing AI will greatly impact their plans in the next few years.

Interest in Pooled Employer Plans (PEPs): The survey reveals a rising interest in PEPs and multiple-employer plans (MEPs) as a means to reduce costs and improve fiduciary oversight, with 29% of sponsors currently using or considering these options for cost savings.

Dividend Increase: Aflac Incorporated raised its quarterly dividend to 61 cents per share, marking a 5.2% increase and achieving 43 consecutive years of dividend hikes, with a current yield of 2.14%.

Share Repurchase Program: The company expanded its share repurchase program by $100 million and repurchased 9.3 million shares worth $1 billion in the third quarter, supported by a solid earnings base and balance sheet.

Earnings Outlook: Despite a projected slight decline in 2025 earnings, Aflac's earnings for 2026 are expected to rebound, and the company ended the third quarter with $6.8 billion in cash and equivalents.

Industry Comparison: Aflac's stock has gained 10% year-to-date, outperforming the industry average of 8.4%, while its peers, Aon and Marsh & McLennan, are also engaging in share buybacks and dividends, albeit with lower yields.

Analyst Downgrades: UBS analyst Kevin Caliendo downgraded Owens & Minor, Inc. from Buy to Neutral, lowering the price target from $7 to $4, with shares closing at $3.97.

Marsh & McLennan Companies: B of A Securities analyst Joshua Shanker downgraded Marsh & McLennan from Neutral to Underperform, reducing the price target from $243 to $181, as shares closed at $178.15.

Charter Communications: Keybanc analyst Brandon Nispel downgraded Charter Communications from Overweight to Sector Weight, with shares closing at $233.84.

Rigetti Computing and Canadian Solar: B. Riley Securities downgraded Rigetti Computing from Buy to Neutral, raising the price target from $35 to $42, while Jefferies downgraded Canadian Solar from Buy to Hold, increasing the price target from $13.7 to $19.64.