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Smart Investors Are Holding Allstate Stock Now: Here's Why
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The Allstate Corporation (ALL - Free Report) is well-poised to grow on the back of rising premiums thanks to rate increases in auto and home insurance businesses. The company keeps expanding its Protection Services business with strategic acquisitions, which positions it for long-term growth.
Allstate — with a market cap of $49.4 billion — is a major property and casualty insurance provider with operations in the United States and Canada. Courtesy of solid prospects, this presently Zacks Rank #3 (Hold) stock is worth retaining at the moment.
ALL's YTD Price Performance
Shares of Allstate have jumped 33.7% in the year-to-date period, outperforming the industry and the S&P 500 Index’s 29% and 17.3% growth, respectively. Currently priced at $187.06, the stock is just below its 52-week high of $187.60. This proximity underscores investor confidence and market optimism about this insurance company’s prospects. It has the ingredients for further price appreciation.
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ALL Growth Drivers
Inflationary pressures and uninterrupted claim expenses were major hurdles in the auto insurance business following the pandemic. Allstate’s strategy of implementing rate hikes to combat these headwinds is proving effective. With inflation easing, the strong pricing environment will benefit its shareholders.
Recent upgrades to claims handling processes aim to reduce losses and improve profitability. Additionally, Allstate reallocates capital from underperforming areas to strengthen its market position in personal property-liability. Divestments and cost-cutting measures are expected to enhance margins, as reflected in the company's earnings estimates.
ALL Earnings Estimates
The Zacks Consensus Estimate for ALL’s 2024 earnings is pegged at $15.14 per share, indicating massive improvement from the year-ago figure of 95 cents. The estimate witnessed 10 upward revisions over the past month against no downward movement. The consensus mark for 2025 earnings suggests further 17.7% year-over-year growth. Allstate beat on earnings in all the last four quarters, with an average surprise of 142.7%. This is depicted in the figure below.
The consensus mark for 2024 and 2025 revenues signals 11% and 6.3% year-over-year growth, respectively.
Key Concerns for ALL
There are a few factors that investors should keep an eye on.
Allstate’s trailing 12-month price-to-book value of 2.98X is higher than the industry’s average of 1.62X, making it an overvalued stock. Its rising debt level can become concerning in the future. Debt amounted to $8.1 billion at the second quarter-end, while cash balance of $599 million decreased from $722 million at 2023-end. Its total debt to capital of 30.3% is higher than the industry average of 17.2%. Nevertheless, we believe that a systematic and strategic plan of action will drive ALL’s growth in the long term.
The Zacks Consensus Estimate for Aflac’s current-year earnings is pegged at $6.73 per share, which indicates 8% year-over-year growth. It witnessed seven upward estimate revisions in the past 30 days against no downward movements. AFL beat earnings estimates in three of the past four quarters and missed once, with an average surprise of 8.2%.
The Zacks Consensus Estimate for Brown & Brown’s 2024 earnings indicates 31% year-over-year growth. During the past two months, BRO has witnessed six upward estimate revisions against none in the opposite direction. It beat earnings estimates in each of the past four quarters, with an average surprise of 9.8%.
The Zacks Consensus Estimate for Arthur J. Gallagher’s current-year earnings suggests a 16% year-over-year jump. During the past two months, AJG has witnessed six upward estimate revisions against none in the opposite direction. The consensus mark for current-year revenues indicates 14.5% growth from a year ago.
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Smart Investors Are Holding Allstate Stock Now: Here's Why
The Allstate Corporation (ALL - Free Report) is well-poised to grow on the back of rising premiums thanks to rate increases in auto and home insurance businesses. The company keeps expanding its Protection Services business with strategic acquisitions, which positions it for long-term growth.
Allstate — with a market cap of $49.4 billion — is a major property and casualty insurance provider with operations in the United States and Canada. Courtesy of solid prospects, this presently Zacks Rank #3 (Hold) stock is worth retaining at the moment.
ALL's YTD Price Performance
Shares of Allstate have jumped 33.7% in the year-to-date period, outperforming the industry and the S&P 500 Index’s 29% and 17.3% growth, respectively. Currently priced at $187.06, the stock is just below its 52-week high of $187.60. This proximity underscores investor confidence and market optimism about this insurance company’s prospects. It has the ingredients for further price appreciation.
ALL Growth Drivers
Inflationary pressures and uninterrupted claim expenses were major hurdles in the auto insurance business following the pandemic. Allstate’s strategy of implementing rate hikes to combat these headwinds is proving effective. With inflation easing, the strong pricing environment will benefit its shareholders.
Recent upgrades to claims handling processes aim to reduce losses and improve profitability. Additionally, Allstate reallocates capital from underperforming areas to strengthen its market position in personal property-liability. Divestments and cost-cutting measures are expected to enhance margins, as reflected in the company's earnings estimates.
ALL Earnings Estimates
The Zacks Consensus Estimate for ALL’s 2024 earnings is pegged at $15.14 per share, indicating massive improvement from the year-ago figure of 95 cents. The estimate witnessed 10 upward revisions over the past month against no downward movement. The consensus mark for 2025 earnings suggests further 17.7% year-over-year growth. Allstate beat on earnings in all the last four quarters, with an average surprise of 142.7%. This is depicted in the figure below.
The Allstate Corporation Price and EPS Surprise
The Allstate Corporation price-eps-surprise | The Allstate Corporation Quote
The consensus mark for 2024 and 2025 revenues signals 11% and 6.3% year-over-year growth, respectively.
Key Concerns for ALL
There are a few factors that investors should keep an eye on.
Allstate’s trailing 12-month price-to-book value of 2.98X is higher than the industry’s average of 1.62X, making it an overvalued stock. Its rising debt level can become concerning in the future. Debt amounted to $8.1 billion at the second quarter-end, while cash balance of $599 million decreased from $722 million at 2023-end. Its total debt to capital of 30.3% is higher than the industry average of 17.2%. Nevertheless, we believe that a systematic and strategic plan of action will drive ALL’s growth in the long term.
Better-Ranked Players
Investors interested in the broader Finance space may look at some better-ranked players like Aflac Incorporated (AFL - Free Report) , Brown & Brown, Inc. (BRO - Free Report) and Arthur J. Gallagher & Co. (AJG - Free Report) , each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for Aflac’s current-year earnings is pegged at $6.73 per share, which indicates 8% year-over-year growth. It witnessed seven upward estimate revisions in the past 30 days against no downward movements. AFL beat earnings estimates in three of the past four quarters and missed once, with an average surprise of 8.2%.
The Zacks Consensus Estimate for Brown & Brown’s 2024 earnings indicates 31% year-over-year growth. During the past two months, BRO has witnessed six upward estimate revisions against none in the opposite direction. It beat earnings estimates in each of the past four quarters, with an average surprise of 9.8%.
The Zacks Consensus Estimate for Arthur J. Gallagher’s current-year earnings suggests a 16% year-over-year jump. During the past two months, AJG has witnessed six upward estimate revisions against none in the opposite direction. The consensus mark for current-year revenues indicates 14.5% growth from a year ago.