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Is a Beat in the Cards for Allstate's (ALL) Q4 Earnings?
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We expect Allstate Corporation (ALL - Free Report) to beat earnings expectations when it reports fourth-quarter and full-year 2016 results, on Feb 1, after market close.
Why a Likely Positive Surprise?
Our proven model shows that Allstate has the right combination of the two key ingredients to beat on earnings.
Zacks ESP:Earnings ESP, which represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate, stands at +3.73%. This is a major indicator of a likely positive earnings surprise for the company. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Allstate carries a Zacks Rank #3 (Hold). Note that stocks with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 have a significantly higher chance of beating estimates.
The combination of Allstate’s favorable Zacks Rank and positive ESP makes us confident of an earnings beat.
We expect earnings to suffer from catastrophe loss of $199 million, pretax ($129 million after tax), in the month of Oct 2016. These expected losses stemmed from Hurricane Matthew in the states of Florida, Georgia, North Carolina, South Carolina and Virginia.
In the fourth quarter, earnings are likely to see an improvement in underlying auto margins, strong results for homeowners' business and a good total return on the investment portfolio.
Earnings will also likely receive a boost from the profit improvement plan undertaken by the company in its auto business, which suffered from high auto claims over past many quarters. One of the components of its profit improvement plan is claims operational excellence, wherein the company is looking for ways to better claims processes and continue to settle claims fairly, deliver the best possible claims experience to its customers, and settle claims as efficiently as possible.
Its capital management via consistent share buyback will also aid earnings.
Stocks That Warrant a Look
Here are some companies that you may consider as our model shows that these have the right combination of elements to post an earnings beat this quarter:
Molina Healthcare Inc. (MOH - Free Report) has an Earnings ESP of +5.33% and a Zacks Rank #3. The company is expected to report fourth-quarter earnings results on Feb 13.
CVS Health Corporation (CVS - Free Report) has an Earnings ESP of +0.60% and a Zacks Rank #3. The company is expected to report fourth-quarter and 2016 earnings results on Feb 9.
Zacks' Top 10 Stocks for 2017
In addition to the stocks discussed above, would you like to know about our 10 finest tickers for the entirety of 2017?
Who wouldn't? These 10 are painstakingly hand-picked from 4,400 companies covered by the Zacks Rank. They are our primary picks to buy and hold. Be among the very first to see them >>
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Is a Beat in the Cards for Allstate's (ALL) Q4 Earnings?
We expect Allstate Corporation (ALL - Free Report) to beat earnings expectations when it reports fourth-quarter and full-year 2016 results, on Feb 1, after market close.
Why a Likely Positive Surprise?
Our proven model shows that Allstate has the right combination of the two key ingredients to beat on earnings.
Zacks ESP: Earnings ESP, which represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate, stands at +3.73%. This is a major indicator of a likely positive earnings surprise for the company. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Allstate carries a Zacks Rank #3 (Hold). Note that stocks with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 have a significantly higher chance of beating estimates.
The combination of Allstate’s favorable Zacks Rank and positive ESP makes us confident of an earnings beat.
Allstate Corporation Price and EPS Surprise
Allstate Corporation (The) Price and EPS Surprise | Allstate Corporation (The) Quote
Factors to Influence Q4 Results
We expect earnings to suffer from catastrophe loss of $199 million, pretax ($129 million after tax), in the month of Oct 2016. These expected losses stemmed from Hurricane Matthew in the states of Florida, Georgia, North Carolina, South Carolina and Virginia.
In the fourth quarter, earnings are likely to see an improvement in underlying auto margins, strong results for homeowners' business and a good total return on the investment portfolio.
Earnings will also likely receive a boost from the profit improvement plan undertaken by the company in its auto business, which suffered from high auto claims over past many quarters. One of the components of its profit improvement plan is claims operational excellence, wherein the company is looking for ways to better claims processes and continue to settle claims fairly, deliver the best possible claims experience to its customers, and settle claims as efficiently as possible.
Its capital management via consistent share buyback will also aid earnings.
Stocks That Warrant a Look
Here are some companies that you may consider as our model shows that these have the right combination of elements to post an earnings beat this quarter:
Anthem Inc. will report fourth-quarter and full-year 2016 earnings results on Feb 1. The company has an Earnings ESP of +6.29% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Molina Healthcare Inc. (MOH - Free Report) has an Earnings ESP of +5.33% and a Zacks Rank #3. The company is expected to report fourth-quarter earnings results on Feb 13.
CVS Health Corporation (CVS - Free Report) has an Earnings ESP of +0.60% and a Zacks Rank #3. The company is expected to report fourth-quarter and 2016 earnings results on Feb 9.
Zacks' Top 10 Stocks for 2017
In addition to the stocks discussed above, would you like to know about our 10 finest tickers for the entirety of 2017?
Who wouldn't? These 10 are painstakingly hand-picked from 4,400 companies covered by the Zacks Rank. They are our primary picks to buy and hold. Be among the very first to see them >>