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Shares of The Allstate Corporation (ALL - Free Report) hit a 52-week high of $41.25 on October 8, as the property & casualty insurer moves toward its third-quarter report next month. This Zacks #1 Rank's (Strong Buy) second quarter results included a 67% earnings surprise; its sixth straight quarter of outperformance.

Upbeat Earnings

Allstate Corporation is scheduled to report its third quarter results on November 1. The Zacks Consensus Estimate is at 98 cents on expected revenue of $7.3 billion.

On July 31, the company reported second-quarter 2012 operating earnings per share of 87 cents, rebounding from a loss of $1.24 per share in the year-ago quarter and topping the Zacks Consensus Estimate by 67.3%.

Solid numbers reflect lower catastrophe losses, which further led to reduced claims expenses, lower operating expenses and higher premiums. Expansions in emerging businesses and other personal lines along with higher investment income also benefited results. These were partially offset by lower realized capital gains and underperformance of Allstate Financial.

Allstate’s total net revenue edged up 2.4% year over year to $8.28 billion, substantially exceeding the Zacks Consensus Estimate of $7.3 billion.

Property-liability insurance claims and claims expenses significantly plunged 24.3% year over year to $4.81 billion.

Operating cash flow escalated 40.8% year over year to $1.77 million during the reported quarter.

The company bought back shares worth $275 million in the second quarter.

Earnings Momentum Heading North

For 2012, eleven of 24 estimates were revised upward in the last 30 days, pushing the Zacks Consensus Estimate higher by 4.6% to $4.34. This translates to a year-over-year increase of 228.6%.

The Zacks Consensus Estimate for 2013 rose 0.5% to $4.43 over the same time frame, representing a year-over-year increase of 2.1%.

Valuation Looks Attractive

Shares of Allstate Corporation currently trade at a forward P/E of 9.5x, a 25.8% discount to the peer group average of 12.8x. On a price-to-book basis, shares currently trade at 1.0x, a 10.3% discount to the peer group average of 1.2x. This looks attractive given that the trailing 12-month ROE is 10.5% versus 9.5% for the peer group average.

Market Performance & Technicals

Following the strong second quarter results, the company’s shares moved above its 50-day moving average as well as the 200-day moving average. Shares have increased approximately 21% since Allstate Corporation released its second quarter results.

Volume is strong, averaging roughly 3.8 million daily. The year-to-date return for the stock came in at 50.3%, compared to the S&P 500’s return of 15.7%.

Headquartered in Northbrook, Illinois, and founded in 1931, Allstate Corporation is a leading property-casualty insurer and the largest publicly-held personal lines carrier in the U.S. The company also provides a range of life insurance and investment products to its diverse customer base.

With a market capitalization of $19.98 billion, Allstate Corporation competes with Progressive Corp. (PGR), among others.

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