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Allstate (ALL) Up 29% in 6 Months: What's Ahead for Investors?
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The Allstate Corporation's (ALL - Free Report) shares have advanced 29.1% in the past six months compared with the industry’s 5.3% growth. The Zacks Finance sector and the S&P 500 Composite Index rose 9.6% and 7%, respectively, in the same time frame. With a market capitalization of $37.6 billion, the average volume of shares traded in the last three months was 1.6 million.
Rate hikes, the buyout of National General, an improved expense ratio in the Property-Liability unit, a well-performing Protection Services business and a solid financial position continue to drive Allstate’s performance.
The property and casualty (P&C) insurer, currently carrying a Zacks Rank #3 (Hold), has a sound surprise history of beating on earnings in three of the trailing four quarters and missing the mark once, delivering an average surprise of 31.50%.
Image Source: Zacks Investment Research
Can ALL Retain the Momentum?
The Zacks Consensus Estimate for Allstate’s 2024 earnings is pegged at $12.38 per share. The consensus mark for 2023 earnings is pinned at a loss of $1.89 per share. The consensus estimate for 2024 revenues is pegged at $61.8 billion, implying 7.6% growth from the 2023 estimate. The company's earnings witnessed three upward estimate revisions for 2024 in the past 60 days against two in the opposite direction.
The top line of Allstate continues to benefit on the back of continually rising P&C insurance premiums and a diversified product suite. P&C insurance premiums improved 10.2% year over year in the first nine months of 2023. Continued rate increases are implemented to counter inflationary headwinds on loss costs, thereby acting as a roadblock to the profits of ALL’s auto insurance business.
Allstate pursues acquisitions to enhance capabilities and expand its nationwide presence. The acquisition of National General in 2021 continues to reap benefits for the premiums of the Property-Liability segment and the trend is expected to sustain in the days ahead. Strong contribution from the Protection Services unit of ALL results from a growing product suite and international growth in Allstate Protection Plans.
The insurer undertakes technology investments to solidify its position as a cost-effective digital insurer. Cost-cutting initiatives bring about improvement in underwriting results and the expense ratio of the Property-Liability unit. In the first nine months of 2023, the expense ratio improved 230 basis points year over year to 20.9%. Allstate divests underperforming businesses and thereby, redirects capital to boost presence in the personal property-liability market and expand protection solutions.
A solid financial stand remains an added advantage for Allstate, substantiated by its growing cash reserves and adequate cash-generating abilities. Cash balance advanced 16.8% from the 2022-end level as of Sep 30, 2023. The financial strength imparts ALL to return capital to shareholders. In February 2023, management approved a 4.7% increase in the quarterly dividend.
Allstate boasts an impressive VGM Score of A. VGM Score helps identify stocks with the most attractive value, the best growth and the most promising momentum.
HCI Group’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 519.59%. The Zacks Consensus Estimate for HCI’s 2024 earnings implies an improvement of 51.4% while the consensus estimate for revenues indicates growth of 19.5% from the corresponding 2023 estimate. The consensus mark for HCI’s 2024 earnings has moved 80.9% north in the past 60 days.
AXIS Capital's earnings beat estimates in each of the trailing four quarters, the average surprise being 22.45%. The Zacks Consensus Estimate for AXS’s 2024 earnings indicates an improvement of 11.6% while the same for revenues implies growth of 3.9% from the corresponding 2023 estimate. The consensus mark for AXS’s 2024 earnings has moved 0.2% north in the past seven days.
RLI’s earnings outpaced estimates in three of the last four quarters and missed the mark once, the average surprise being 145.76%. The Zacks Consensus Estimate for RLI’s 2024 earnings indicates an improvement of 15.9% while the same for revenues implies growth of 13.7% from the corresponding 2023 estimate. The stock has witnessed one upward earnings estimate revision compared with none for 2024 over the past 30 days.
Shares of HCI Group and AXIS Capital have risen 42.6% and 2.8%, respectively, in the past six months. However, the RLI stock has fallen 0.9% in the same time frame.
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Allstate (ALL) Up 29% in 6 Months: What's Ahead for Investors?
The Allstate Corporation's (ALL - Free Report) shares have advanced 29.1% in the past six months compared with the industry’s 5.3% growth. The Zacks Finance sector and the S&P 500 Composite Index rose 9.6% and 7%, respectively, in the same time frame. With a market capitalization of $37.6 billion, the average volume of shares traded in the last three months was 1.6 million.
Rate hikes, the buyout of National General, an improved expense ratio in the Property-Liability unit, a well-performing Protection Services business and a solid financial position continue to drive Allstate’s performance.
The property and casualty (P&C) insurer, currently carrying a Zacks Rank #3 (Hold), has a sound surprise history of beating on earnings in three of the trailing four quarters and missing the mark once, delivering an average surprise of 31.50%.
Image Source: Zacks Investment Research
Can ALL Retain the Momentum?
The Zacks Consensus Estimate for Allstate’s 2024 earnings is pegged at $12.38 per share. The consensus mark for 2023 earnings is pinned at a loss of $1.89 per share. The consensus estimate for 2024 revenues is pegged at $61.8 billion, implying 7.6% growth from the 2023 estimate. The company's earnings witnessed three upward estimate revisions for 2024 in the past 60 days against two in the opposite direction.
The top line of Allstate continues to benefit on the back of continually rising P&C insurance premiums and a diversified product suite. P&C insurance premiums improved 10.2% year over year in the first nine months of 2023. Continued rate increases are implemented to counter inflationary headwinds on loss costs, thereby acting as a roadblock to the profits of ALL’s auto insurance business.
Allstate pursues acquisitions to enhance capabilities and expand its nationwide presence. The acquisition of National General in 2021 continues to reap benefits for the premiums of the Property-Liability segment and the trend is expected to sustain in the days ahead. Strong contribution from the Protection Services unit of ALL results from a growing product suite and international growth in Allstate Protection Plans.
The insurer undertakes technology investments to solidify its position as a cost-effective digital insurer. Cost-cutting initiatives bring about improvement in underwriting results and the expense ratio of the Property-Liability unit. In the first nine months of 2023, the expense ratio improved 230 basis points year over year to 20.9%. Allstate divests underperforming businesses and thereby, redirects capital to boost presence in the personal property-liability market and expand protection solutions.
A solid financial stand remains an added advantage for Allstate, substantiated by its growing cash reserves and adequate cash-generating abilities. Cash balance advanced 16.8% from the 2022-end level as of Sep 30, 2023. The financial strength imparts ALL to return capital to shareholders. In February 2023, management approved a 4.7% increase in the quarterly dividend.
Allstate boasts an impressive VGM Score of A. VGM Score helps identify stocks with the most attractive value, the best growth and the most promising momentum.
Stocks to Consider
Some better-ranked stocks in the P&C insurance space are HCI Group, Inc. (HCI - Free Report) , AXIS Capital Holdings Limited (AXS - Free Report) and RLI Corp. (RLI - Free Report) . While HCI Group sports a Zacks Rank #1 (Strong Buy) at present, AXIS Capital and RLI carry a Zacks Rank #2 (Buy) each. You can see the complete list of today’s Zacks #1 Rank stocks here.
HCI Group’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 519.59%. The Zacks Consensus Estimate for HCI’s 2024 earnings implies an improvement of 51.4% while the consensus estimate for revenues indicates growth of 19.5% from the corresponding 2023 estimate. The consensus mark for HCI’s 2024 earnings has moved 80.9% north in the past 60 days.
AXIS Capital's earnings beat estimates in each of the trailing four quarters, the average surprise being 22.45%. The Zacks Consensus Estimate for AXS’s 2024 earnings indicates an improvement of 11.6% while the same for revenues implies growth of 3.9% from the corresponding 2023 estimate. The consensus mark for AXS’s 2024 earnings has moved 0.2% north in the past seven days.
RLI’s earnings outpaced estimates in three of the last four quarters and missed the mark once, the average surprise being 145.76%. The Zacks Consensus Estimate for RLI’s 2024 earnings indicates an improvement of 15.9% while the same for revenues implies growth of 13.7% from the corresponding 2023 estimate. The stock has witnessed one upward earnings estimate revision compared with none for 2024 over the past 30 days.
Shares of HCI Group and AXIS Capital have risen 42.6% and 2.8%, respectively, in the past six months. However, the RLI stock has fallen 0.9% in the same time frame.