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Illinois-based The Allstate Corporation (ALL) is one of the largest property-casualty insurers in the U.S. It also provides a range of life insurance and investment products to its diverse customer base. Valued at a market cap of $50.9 billion, the company is expected to announce its fiscal Q3 earnings results after the market closes on Wednesday, Oct. 30.
Ahead of this event, analysts project the insurance company to report a profit of $2.20 per share, up 171.6% from $0.81 per share in the year-ago quarter. The company has consistently beaten Wall Street's earnings estimates in each of the last four quarters, which is impressive. Its adjusted earnings of $1.61 per share in the most recent quarter outpaced the consensus estimates by a whopping 387.9% margin and made a remarkable turnaround from a loss of $4.42 per share in the year-ago quarter.
This stunning Q2 EPS surprise can be primarily attributed to the company’s improved Property-Liability underwriting results and lower property and casualty insurance claims and claims expenses, leading to an overall decline in total costs and expenses. For fiscal 2024, analysts expect ALL to report an EPS of $14.16, significantly up by 1390.5% from $0.95 in fiscal 2023. Moreover, EPS is expected to increase 27.5% year-over-year to $18.06 in fiscal 2025.
Shares of ALL have surged 37.7% on a YTD basis, significantly outpacing both the S&P 500 Index's ($SPX) 21.5% rise and the Financial Select Sector SPDR Fund’s (XLF) 25.5% return over the same period.
Shares of ALL gained 5.2% after the company announced that it had signed a definitive agreement to sell its employer voluntary-benefits business for $2 billion to its peer StanCorp Financial. The move was in line with the company’s efforts to exit its health and benefits operations, and the news excited the investors, leading to its upward price movement.
Moreover, the stock closed up 3.7% after its better-than-expected Q2 earnings release on Jul. 31. Along with significantly surpassing Wall Street’s adjusted EPS estimates, its revenue of $15.7 billion climbed 12.4% from a year ago primarily due to growth in Property-Liability earned premiums. The company’s net investment income improved 16.7% year over year to $712 million, further contributing to its price surge.
Yet, analysts' consensus view on Allstate’s stock is cautiously optimistic, with a "Moderate Buy" rating overall. Among 20 analysts covering the stock, 15 recommend a "Strong Buy," one suggests a "Moderate Buy," two indicate a “Hold,” and two recommend a “Strong Sell.”
The average analyst price target for ALL is $208.50, indicating an 8.1% potential upside from the current levels.
On the date of publication, Neharika Jain did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
