What Is The Allstate Corporation’s (NYSE:ALL) Share Price Doing?
Today we’re going to take a look at the well-established The Allstate Corporation (NYSE:ALL). The company’s stock received a lot of attention from a substantial price movement on the NYSE in the over the last few months, increasing to $104.43 at one point, and dropping to the lows of $90.06. This high level of volatility gives investors the opportunity to enter into the stock, and potentially buy at an artificially low price. A question to answer is whether Allstate’s current trading price of $96.2 reflective of the actual value of the large-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Allstate’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change. Check out our latest analysis for Allstate
What is Allstate worth?
According to my valuation model, Allstate seems to be fairly priced at around 13.36% below my intrinsic value, which means if you buy Allstate today, you’d be paying a reasonable price for it. And if you believe the company’s true value is $111.03, then there isn’t much room for the share price grow beyond what it’s currently trading. Furthermore, it seems like Allstate’s share price is quite stable, which means there may be less chances to buy low in the future now that it’s fairly valued. This is because the stock is less volatile than the wider market given its low beta.
What kind of growth will Allstate generate?
Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Buying a great company with a robust outlook at a cheap price is always a good investment, so let’s also take a look at the company’s future expectations. Though in the case of Allstate, it is expected to deliver a negative earnings growth of -2.26%, which doesn’t help build up its investment thesis. It appears that risk of future uncertainty is high, at least in the near term.
What this means for you:
Are you a shareholder? ALL seems fairly priced right now, but given the uncertainty from negative returns in the future, this could be the right time to reduce the risk in your portfolio. Is your current exposure to the stock beneficial for your total portfolio? And is the opportunity cost of holding a negative-outlook stock too high? Before you make a decision on the stock, take a look at whether its fundamentals have changed.
Are you a potential investor? If you’ve been keeping tabs on ALL for a while, now may not be the most optimal time to buy, given it is trading around its fair value. The price seems to be trading at fair value, which means there’s less benefit from mispricing. Furthermore, the negative growth outlook increases the risk of holding the stock. However, there are also other important factors we haven’t considered today, which can help gel your views on ALL should the price fluctuate below its true value.
Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on Allstate. You can find everything you need to know about Allstate in the latest infographic research report. If you are no longer interested in Allstate, you can use our free platform to see my list of over 50 other stocks with a high growth potential.
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.
