ALL

Why Allstate Stock Is Up Today

Allstate (NYSE: ALL) shareholders were in good hands this earnings season. The company easily topped expectations in the fourth quarter, helping to send the stock up as much as 6% in Thursday trading.

Mild weather leads to better results

It has been a relatively mild winter in North America, and that has been a big boost to home and auto insurers like Allstate. The company earned $5.82 per share in the fourth quarter on revenue of $14.83 billion, beating Wall Street's consensus $3.99 per share on $12.94 billion in sales estimate.

The company reported net income of $1.5 billion in the quarter, which CEO Tom Wilson attributed to "improved auto profitability and mild weather." Revenue was up 8.7% year over year, fueled by a $1.2 billion increase in property/liability premiums due to strong pricing power.

For the year, Allstate reported a $316 million loss on revenue of $57.1 billion. That's an improvement over 2022, when Allstate lost $1.4 billion on sales of $51.4 billion.

Is Allstate a buy after its stronger-than-expected results?

Allstate has been focused on modernizing its pricing, and the results are a good sign that the efforts are getting the desired results. While losses and weather are hard to predict, if the company can price its policies correctly, there is a lot of margin for error.

That's said, there are clear limits to growth and profitability here, and with Allstate shares now up 17% over the past year, questions remain about how much higher the stock can go in the quarters to come.

The stock was unable to hold its initial 6% pop, trading up just 1.7% as of 11:15 a.m. ET Thursday. While the quarter gave current holders nothing to worry about, there isn't a real compelling reason to rush in right now.

Should you invest $1,000 in Allstate right now?

Before you buy stock in Allstate, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Allstate wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than tripled the return of S&P 500 since 2002*.

See the 10 stocks

*Stock Advisor returns as of February 6, 2024

Lou Whiteman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Tags

More Related Articles

Info icon

This data feed is not available at this time.

Sign up for Smart Investing to get the latest news, strategies and tips to help you invest smarter.