Shares of The Allstate Corporation ALL have rallied 41% over the year-to-date period to close at $197.29 on Wednesday. The significant gains have pushed the stock’s price closer to the upper end of its 52-week range of $134.17-$201. It outperformed its peers like MetLife, Inc. MET and American International Group, Inc. AIG, the overall industry, and the S&P 500 Index during this time.
YTD Price Performance Comparison
Image Source: Zacks Investment Research
ALL’s Earnings Estimates & Valuation
The Zacks Consensus Estimate for Allstate’s 2024 adjusted earnings is currently pegged at $16.01 per share, indicating a massive growth from the year-ago period’s figure of 95 cents. The consensus mark for 2025 adjusted earnings signals further 19.5% growth. The consensus estimate for 2024 and 2025 revenues suggests 12.1% and 7.1% year-over-year growth, respectively. It beat earnings estimates in each of the past four quarters with an average surprise of 135.2%. This is depicted in the graph below.
The Allstate Corporation Price and EPS Surprise
The Allstate Corporation price-eps-surprise | The Allstate Corporation Quote
With encouraging earnings estimates, Allstate’sprice-to-earnings valuation is very attractive at just 10.50 forward earnings. This is nicely beneath the industry average of 28.85. As such, even trading near yearly highs, the stock still offers great value to investors, having a Value Score of B currently.
Image Source: Zacks Investment Research
ALL’s Growth Drivers
The company's strong revenue growth is driven by rising premiums from a diverse product portfolio, strategic acquisitions, and disciplined pricing. Net premiums earned have increased 13.9% in 2021, 8.7% in 2022, 10.4% in 2023, and 11.5% in the first nine months of 2024. We project an 11.2% increase for the full year of 2024. The growth is further supported by strategic measures, including rate hikes, product improvements, and a shift in focus toward high-return businesses.
Allstate is proactively divesting non-core operations to enhance profitability. It plans to sell its Employer Voluntary Benefits business to StanCorp by mid-2025 and is considering selling its Individual and Group Health units. Also, it is implementing cost-cutting measures to boost efficiency, improve underwriting results, and reinvest savings into technology and product development.
The company’s strong cash flow generation supports leverage improvement and shareholder returns. Operating cash flow more than doubled in the first nine months of 2024. During the same period, it paid $719 million in dividends to common shareholders. With a current dividend yield of 1.9%, the company significantly outperforms the industry average of 0.3%.
Buy ALL Stock Now for Further Upside
The Wall Street average price target for ALL stock is $219 per share, indicating a potential upside of nearly 11.4% from current levels. If Allstate continues to execute its product and pricing strategies effectively while improving underwriting results, investors could see significant gains.
Despite the stock trading near its 52-week high, it's still an opportune time to buy ALL, thanks to its cash generation ability, attractive valuation and promising earnings projections. It currently carries a Zacks Rank #2 (Buy) and has a VGM Score of A.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Research Chief Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
This company targets millennial and Gen Z audiences, generating nearly $1 billion in revenue last quarter alone. A recent pullback makes now an ideal time to jump aboard. Of course, all our elite picks aren’t winners but this one could far surpass earlier Zacks’ Stocks Set to Double like Nano-X Imaging which shot up +129.6% in little more than 9 months.
Free: See Our Top Stock And 4 Runners UpAmerican International Group, Inc. (AIG) : Free Stock Analysis Report
MetLife, Inc. (MET) : Free Stock Analysis Report
The Allstate Corporation (ALL) : Free Stock Analysis Report
To read this article on Zacks.com click here.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
