JPMorgan says Street might be too bearish on Aflac, upgrades the stock to overweight

The Aflac Duck balloon during the Macy's Thanksgiving Day Parade on November 24, 2016, in New York.
Kena Betancur | AFP | Getty Images

Wall Street analysts may have gotten too bearish on Aflac, making it easy for the insurance company to exceed earnings expectations, according to JPMorgan analysts, who upgraded the stock to buy from hold.

"We feel that AFL presents the best risk-reward in the sector given our fundamental view, negative sentiment, and recent underperformance," equity analyst Jimmy Bhullar wrote in a research note on Monday. "In our opinion, AFL's valuation offers attractive upside with limited downside," he said.

After rising more than 20 percent in the past year, shares of Aflac stalled in the last three months, trading up 0.8 percent compared with a gain of 7 percent for the S&P 500.