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Allstate (ALL) Gains But Lags Market: What You Should Know

Zacks Equity Research

Allstate (ALL) closed the most recent trading day at $109.13, moving +0.66% from the previous trading session. This move lagged the S&P 500's daily gain of 0.69%. At the same time, the Dow added 0.22%, and the tech-heavy Nasdaq gained 0.91%.

Heading into today, shares of the insurer had gained 0.05% over the past month, outpacing the Finance sector's loss of 0.09% and the S&P 500's loss of 0.61% in that time.

Wall Street will be looking for positivity from ALL as it approaches its next earnings report date. This is expected to be October 29, 2019. On that day, ALL is projected to report earnings of $2.46 per share, which would represent year-over-year growth of 27.46%. Meanwhile, our latest consensus estimate is calling for revenue of $9.07 billion, down 11.88% from the prior-year quarter.

ALL's full-year Zacks Consensus Estimates are calling for earnings of $9.77 per share and revenue of $36.18 billion. These results would represent year-over-year changes of +21.07% and -11.09%, respectively.

It is also important to note the recent changes to analyst estimates for ALL. These recent revisions tend to reflect the evolving nature of short-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. The Zacks Consensus EPS estimate has moved 1.75% higher within the past month. ALL is currently sporting a Zacks Rank of #1 (Strong Buy).

Digging into valuation, ALL currently has a Forward P/E ratio of 11.09. This valuation marks a discount compared to its industry's average Forward P/E of 14.95.

We can also see that ALL currently has a PEG ratio of 1.33. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. The Insurance - Property and Casualty was holding an average PEG ratio of 1.65 at yesterday's closing price.

The Insurance - Property and Casualty industry is part of the Finance sector. This industry currently has a Zacks Industry Rank of 81, which puts it in the top 32% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

You can find more information on all of these metrics, and much more, on Zacks.com.


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