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.
Allstate (ALL) Down 3.2% Since Last Earnings Report: Can It Rebound?
Read MoreHide Full Article
It has been about a month since the last earnings report for Allstate (ALL - Free Report) . Shares have lost about 3.2% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Allstate due for a breakout? 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 Q4 Earnings Beat on Solid Underwriting Results
The Allstate Corporation reported a fourth-quarter 2023 adjusted net income of $5.82 per share, which surpassed the Zacks Consensus Estimate by 50.4%. The company reported a loss of $1.33 per share in the year-ago quarter.
Operating revenues of $14.9 billion rose 10% year over year in the quarter under review. The year-over-year growth was due to a 10.7% increase in Property-Liability insurance premiums earned. Yet, the top line fell short of the consensus mark by a whisker.
The quarterly results benefited on the back of prudent rate increases, a rise in investment income, strong underwriting results, favorable weather conditions and a decline in expenses. However, the upside was partly offset by lower performance-based investment income.
Q4 Operations
Net investment income improved 8.4% year over year to $604 million in the fourth quarter but missed the Zacks Consensus Estimate of $643 million. The metric benefited on the back of improved yields from the fixed-income portfolio, resulting in 30.2% year-over-year growth in market-based investment income. However, performance-based investment income plunged 59.2% year over year due to a decline in valuation increases and reduced income from the underlying investments’ sale.
Total costs and expenses of $13 billion decreased 7.5% year over year and also came in lower than our estimate of $13.7 billion. The year-over-year decline was due to lower property and casualty insurance claims and claims expenses.
Allstate generated a pretax income of $1.8 billion in the quarter under review against the year-ago quarter’s pretax loss of $410 million.
Total policies in force were 192.8 million as of Dec 31, 2023, up 2% year over year.
Catastrophe losses dropped 91.3% year over year to $68 million in the fourth quarter.
Segmental Performances
The Property-Liability segment recorded premiums earned of $12.6 billion, which advanced 10.7% year over year on the back of increased average premiums resulting from rate hikes. The metric almost touched the Zacks Consensus Estimate but missed our estimate of $12.7 billion. The Allstate brand gained from improved auto and homeowners average premiums, while average premium growth and an increase in the number of policies contributed to the results of National General.
Underwriting income in the unit amounted to $1.3 billion in the fourth quarter against the prior-year quarter’s underwriting loss of $1 billion. The metric was aided by a rise in earned premiums, reduced catastrophe losses and favorable underlying loss experience. The combined ratio of 89.5% improved 1,960 basis points (bps) year over year in the quarter under review and came lower than our estimate of 96.6%.
The Protection Services segment’s revenues grew 11.8% year over year to $719 million in the fourth quarter, thanks to strength in Allstate Protection Plans. However, the figure fell short of the consensus mark of $731 million. Adjusted net income of $4 million declined nearly 10-fold year over year due to a rise in state income taxes and deferred tax liabilities.
The Allstate Health and Benefits segment reported premium and contract charges of $467 million, which improved 7.1% year over year in the quarter under review, and beat the Zacks Consensus Estimate of $447 million and our estimate of $435.1 million. The unit’s performance was driven by sound individual health and group health results. Adjusted net income advanced 3.4% year over year to $60 million, which matched the consensus mark but outpaced our estimate of $56.5 million.
Financial Update (as of Dec 31, 2023)
Allstate exited the fourth quarter with a cash balance of $722 million, which declined 1.9% from the figure at 2022 end. Total assets of $103.4 billion increased 5.5% from the 2022-end level.
Debt amounted to $7.9 billion, which dipped 0.3% from the figure as of Dec 31, 2022.
Total shareholders’ equity of $17.8 billion increased 1.6% from the 2022-end figure.
Book value per common share was $59.39 as of Dec 31, 2023, which grew 2.2% from the 2022 figure.
The adjusted net income return on Allstate’s common shareholders’ equity in the trailing 12-month period was 1.5%. The metric was recorded at a negative figure of 1.2% in the prior-year comparable period.
Full-Year Update
Allstate reported an adjusted net income of 95 cents per share in 2023. A loss of 88 cents per share was reported in 2022.
Consolidated revenues rose 11.1% year over year to $57.1 billion. Property-Liability insurance premiums earned of $48.4 billion rose 10.3% year over year. Net investment income increased 3.1% year over year to $2.5 billion.
It incurred an underwriting loss of $2.2 billion, narrower than the prior year’s loss of $2.9 billion. The combined ratio improved 210 bps year over year to 104.5%.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended upward during the past month.
The consensus estimate has shifted 9.32% due to these changes.
VGM Scores
At this time, Allstate has an average Growth Score of C, however its Momentum Score is doing a lot better with an A. Charting a somewhat similar path, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Allstate has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Allstate belongs to the Zacks Insurance - Property and Casualty industry. Another stock from the same industry, Cincinnati Financial (CINF - Free Report) , has gained 9% over the past month. More than a month has passed since the company reported results for the quarter ended December 2023.
Cincinnati Financial reported revenues of $2.31 billion in the last reported quarter, representing a year-over-year change of +10.8%. EPS of $2.28 for the same period compares with $1.27 a year ago.
Cincinnati Financial is expected to post earnings of $1.48 per share for the current quarter, representing a year-over-year change of +66.3%. Over the last 30 days, the Zacks Consensus Estimate has changed -7%.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #2 (Buy) for Cincinnati Financial. Also, the stock has a VGM Score of B.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Allstate (ALL) Down 3.2% Since Last Earnings Report: Can It Rebound?
It has been about a month since the last earnings report for Allstate (ALL - Free Report) . Shares have lost about 3.2% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Allstate due for a breakout? 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 Q4 Earnings Beat on Solid Underwriting Results
The Allstate Corporation reported a fourth-quarter 2023 adjusted net income of $5.82 per share, which surpassed the Zacks Consensus Estimate by 50.4%. The company reported a loss of $1.33 per share in the year-ago quarter.
Operating revenues of $14.9 billion rose 10% year over year in the quarter under review. The year-over-year growth was due to a 10.7% increase in Property-Liability insurance premiums earned. Yet, the top line fell short of the consensus mark by a whisker.
The quarterly results benefited on the back of prudent rate increases, a rise in investment income, strong underwriting results, favorable weather conditions and a decline in expenses. However, the upside was partly offset by lower performance-based investment income.
Q4 Operations
Net investment income improved 8.4% year over year to $604 million in the fourth quarter but missed the Zacks Consensus Estimate of $643 million. The metric benefited on the back of improved yields from the fixed-income portfolio, resulting in 30.2% year-over-year growth in market-based investment income. However, performance-based investment income plunged 59.2% year over year due to a decline in valuation increases and reduced income from the underlying investments’ sale.
Total costs and expenses of $13 billion decreased 7.5% year over year and also came in lower than our estimate of $13.7 billion. The year-over-year decline was due to lower property and casualty insurance claims and claims expenses.
Allstate generated a pretax income of $1.8 billion in the quarter under review against the year-ago quarter’s pretax loss of $410 million.
Total policies in force were 192.8 million as of Dec 31, 2023, up 2% year over year.
Catastrophe losses dropped 91.3% year over year to $68 million in the fourth quarter.
Segmental Performances
The Property-Liability segment recorded premiums earned of $12.6 billion, which advanced 10.7% year over year on the back of increased average premiums resulting from rate hikes. The metric almost touched the Zacks Consensus Estimate but missed our estimate of $12.7 billion. The Allstate brand gained from improved auto and homeowners average premiums, while average premium growth and an increase in the number of policies contributed to the results of National General.
Underwriting income in the unit amounted to $1.3 billion in the fourth quarter against the prior-year quarter’s underwriting loss of $1 billion. The metric was aided by a rise in earned premiums, reduced catastrophe losses and favorable underlying loss experience. The combined ratio of 89.5% improved 1,960 basis points (bps) year over year in the quarter under review and came lower than our estimate of 96.6%.
The Protection Services segment’s revenues grew 11.8% year over year to $719 million in the fourth quarter, thanks to strength in Allstate Protection Plans. However, the figure fell short of the consensus mark of $731 million. Adjusted net income of $4 million declined nearly 10-fold year over year due to a rise in state income taxes and deferred tax liabilities.
The Allstate Health and Benefits segment reported premium and contract charges of $467 million, which improved 7.1% year over year in the quarter under review, and beat the Zacks Consensus Estimate of $447 million and our estimate of $435.1 million. The unit’s performance was driven by sound individual health and group health results. Adjusted net income advanced 3.4% year over year to $60 million, which matched the consensus mark but outpaced our estimate of $56.5 million.
Financial Update (as of Dec 31, 2023)
Allstate exited the fourth quarter with a cash balance of $722 million, which declined 1.9% from the figure at 2022 end. Total assets of $103.4 billion increased 5.5% from the 2022-end level.
Debt amounted to $7.9 billion, which dipped 0.3% from the figure as of Dec 31, 2022.
Total shareholders’ equity of $17.8 billion increased 1.6% from the 2022-end figure.
Book value per common share was $59.39 as of Dec 31, 2023, which grew 2.2% from the 2022 figure.
The adjusted net income return on Allstate’s common shareholders’ equity in the trailing 12-month period was 1.5%. The metric was recorded at a negative figure of 1.2% in the prior-year comparable period.
Full-Year Update
Allstate reported an adjusted net income of 95 cents per share in 2023. A loss of 88 cents per share was reported in 2022.
Consolidated revenues rose 11.1% year over year to $57.1 billion. Property-Liability insurance premiums earned of $48.4 billion rose 10.3% year over year. Net investment income increased 3.1% year over year to $2.5 billion.
It incurred an underwriting loss of $2.2 billion, narrower than the prior year’s loss of $2.9 billion. The combined ratio improved 210 bps year over year to 104.5%.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended upward during the past month.
The consensus estimate has shifted 9.32% due to these changes.
VGM Scores
At this time, Allstate has an average Growth Score of C, however its Momentum Score is doing a lot better with an A. Charting a somewhat similar path, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Allstate has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Allstate belongs to the Zacks Insurance - Property and Casualty industry. Another stock from the same industry, Cincinnati Financial (CINF - Free Report) , has gained 9% over the past month. More than a month has passed since the company reported results for the quarter ended December 2023.
Cincinnati Financial reported revenues of $2.31 billion in the last reported quarter, representing a year-over-year change of +10.8%. EPS of $2.28 for the same period compares with $1.27 a year ago.
Cincinnati Financial is expected to post earnings of $1.48 per share for the current quarter, representing a year-over-year change of +66.3%. Over the last 30 days, the Zacks Consensus Estimate has changed -7%.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #2 (Buy) for Cincinnati Financial. Also, the stock has a VGM Score of B.