We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Why Is Allstate (ALL) Up 2.6% Since Last Earnings Report?
Read MoreHide Full Article
A month has gone by since the last earnings report for Allstate (ALL - Free Report) . Shares have added about 2.6% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Allstate due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Allstate Q2 Loss Wider Than Expected on High Cat Losses
Allstate incurred a second-quarter 2023 adjusted loss of $4.42 per share, wider than the Zacks Consensus Estimate of a loss of $3.83 per share. The figure was also wider than the prior-year quarter’s loss of 75 cents per share.
Operating revenues of $14,130 million advanced 9.1% year over year in the quarter under review on the back of 9.8% growth in property and casualty (P&C) insurance premiums. The top line missed the consensus mark by a whisker.
The quarterly results suffered a blow due to elevated catastrophe losses, inducing weakness in its underwriting results. Higher claim frequency and an increased expense level also dampened Allstate’s performance in the second quarter. Nevertheless, the downside is partly offset by rate increases in auto and homeowners insurance businesses.
Q2 Operations
Net investment income rose 8.5% year over year to $610 million, higher than our estimate of $519.3 million. The growth came on the back of increased yields from fixed income portfolio. Market-based investment income soared 45.7% year over year in the quarter under review while performance-based investment income plunged 46.2% year over year.
Total costs and expenses came in at $15,727 million, which escalated 16.2% year over year mainly due to higher P&C insurance claims and claim expenses.
Allstate incurred a pretax loss of $1,748 million in the second quarter, wider than the prior-year quarter’s loss of $1,311 million.
As of Jun 30, 2023, total policies in force of 188 million inched up 0.2% year over year.
Catastrophe losses more than doubled year over year to $2,696 million in the second quarter.
Segmental Performances
The Property-Liability segment recorded premiums written of $12,620 million, which improved 9.7% year over year in the second quarter and came higher than our estimate of $11,572.2 million. The year-over-year improvement can be attributed to strength in the Allstate brand and National General. While the Allstate brand benefited on the back of expanding auto and homeowners average premiums, growth of policies in force provided an impetus to National General.
The unit incurred an underwriting loss of $2,094 million, wider than the prior-year quarter’s loss of $864 million. The underwriting results took a hit from elevated catastrophe losses and higher personal auto injury coverages. The underlying combined ratio improved 50 basis points (bps) year over year to 92.9% in the quarter under review.
The Protection Services segment’s revenues grew 9.1% year over year to $686 million in the second quarter, thanks to an expanding product suite, international growth and rate increases. Adjusted net income of $41 million slid 2% year over year and also missed our estimate of $53.7 million.
The Allstate Health and Benefits segment reported total premium and contract charges of $453 million, which tumbled 2.6% year over year in the quarter under review due to softness in individual health and employer voluntary benefits. Adjusted net income fell 14.9% year over year to $57 million and fell short of our estimate of $61.3 million.
Financial Update (as of Jun 30, 2023)
Allstate exited the second quarter with a cash balance of $699 million, which slipped 5% from the 2022-end level. Total assets of $100.5 billion increased 2.6% from the figure at 2022 end.
Debt amounted to $7,949 million, which dipped 0.2% from the figure as of Dec 31, 2022.
Total shareholders’ equity declined 11.3% from the 2022-end level to $15,517 million.
Book value per common share came in at $51.29, which dropped 22.2% year over year.
The adjusted net income return on ALL’s common shareholders’ equity in the trailing 12-month period came in at a negative figure of 12.7%. The metric was recorded at 7.1% in the prior-year comparable period.
Capital Deployment Update
Due to underwriting losses and subsequent net loss reported by Allstate in the second quarter of 2023, share repurchases pursuant to the $5 billion authorization were temporarily put on hold in July.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates review.
The consensus estimate has shifted -47.33% due to these changes.
VGM Scores
Currently, Allstate has a subpar Growth Score of D, though it is lagging a bit on the Momentum Score front with an F. However, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Allstate has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Why Is Allstate (ALL) Up 2.6% Since Last Earnings Report?
A month has gone by since the last earnings report for Allstate (ALL - Free Report) . Shares have added about 2.6% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Allstate due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Allstate Q2 Loss Wider Than Expected on High Cat Losses
Allstate incurred a second-quarter 2023 adjusted loss of $4.42 per share, wider than the Zacks Consensus Estimate of a loss of $3.83 per share. The figure was also wider than the prior-year quarter’s loss of 75 cents per share.
Operating revenues of $14,130 million advanced 9.1% year over year in the quarter under review on the back of 9.8% growth in property and casualty (P&C) insurance premiums. The top line missed the consensus mark by a whisker.
The quarterly results suffered a blow due to elevated catastrophe losses, inducing weakness in its underwriting results. Higher claim frequency and an increased expense level also dampened Allstate’s performance in the second quarter. Nevertheless, the downside is partly offset by rate increases in auto and homeowners insurance businesses.
Q2 Operations
Net investment income rose 8.5% year over year to $610 million, higher than our estimate of $519.3 million. The growth came on the back of increased yields from fixed income portfolio. Market-based investment income soared 45.7% year over year in the quarter under review while performance-based investment income plunged 46.2% year over year.
Total costs and expenses came in at $15,727 million, which escalated 16.2% year over year mainly due to higher P&C insurance claims and claim expenses.
Allstate incurred a pretax loss of $1,748 million in the second quarter, wider than the prior-year quarter’s loss of $1,311 million.
As of Jun 30, 2023, total policies in force of 188 million inched up 0.2% year over year.
Catastrophe losses more than doubled year over year to $2,696 million in the second quarter.
Segmental Performances
The Property-Liability segment recorded premiums written of $12,620 million, which improved 9.7% year over year in the second quarter and came higher than our estimate of $11,572.2 million. The year-over-year improvement can be attributed to strength in the Allstate brand and National General. While the Allstate brand benefited on the back of expanding auto and homeowners average premiums, growth of policies in force provided an impetus to National General.
The unit incurred an underwriting loss of $2,094 million, wider than the prior-year quarter’s loss of $864 million. The underwriting results took a hit from elevated catastrophe losses and higher personal auto injury coverages. The underlying combined ratio improved 50 basis points (bps) year over year to 92.9% in the quarter under review.
The Protection Services segment’s revenues grew 9.1% year over year to $686 million in the second quarter, thanks to an expanding product suite, international growth and rate increases. Adjusted net income of $41 million slid 2% year over year and also missed our estimate of $53.7 million.
The Allstate Health and Benefits segment reported total premium and contract charges of $453 million, which tumbled 2.6% year over year in the quarter under review due to softness in individual health and employer voluntary benefits. Adjusted net income fell 14.9% year over year to $57 million and fell short of our estimate of $61.3 million.
Financial Update (as of Jun 30, 2023)
Allstate exited the second quarter with a cash balance of $699 million, which slipped 5% from the 2022-end level. Total assets of $100.5 billion increased 2.6% from the figure at 2022 end.
Debt amounted to $7,949 million, which dipped 0.2% from the figure as of Dec 31, 2022.
Total shareholders’ equity declined 11.3% from the 2022-end level to $15,517 million.
Book value per common share came in at $51.29, which dropped 22.2% year over year.
The adjusted net income return on ALL’s common shareholders’ equity in the trailing 12-month period came in at a negative figure of 12.7%. The metric was recorded at 7.1% in the prior-year comparable period.
Capital Deployment Update
Due to underwriting losses and subsequent net loss reported by Allstate in the second quarter of 2023, share repurchases pursuant to the $5 billion authorization were temporarily put on hold in July.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates review.
The consensus estimate has shifted -47.33% due to these changes.
VGM Scores
Currently, Allstate has a subpar Growth Score of D, though it is lagging a bit on the Momentum Score front with an F. However, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Allstate has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.