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

Zacks Equity Research

In the latest trading session, Allstate (ALL) closed at $106.57, marking a +0.63% move from the previous day. This move lagged the S&P 500's daily gain of 0.91%. Meanwhile, the Dow gained 0.7%, and the Nasdaq, a tech-heavy index, added 1.02%.

Coming into today, shares of the insurer had gained 0.21% in the past month. In that same time, the Finance sector lost 1.21%, while the S&P 500 lost 2.74%.

Investors will be hoping for strength from ALL as it approaches its next earnings release, which is expected to be October 29, 2019. On that day, ALL is projected to report earnings of $2.23 per share, which would represent year-over-year growth of 15.54%. Meanwhile, our latest consensus estimate is calling for revenue of $9.07 billion, down 11.88% from the prior-year quarter.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $9.53 per share and revenue of $36.18 billion. These totals would mark changes of +18.09% and -11.09%, respectively, from last year.

It is also important to note the recent changes to analyst estimates for ALL. Recent revisions tend to reflect the latest near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about 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.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Within the past 30 days, our consensus EPS projection remained stagnant. ALL is holding a Zacks Rank of #2 (Buy) right now.

Valuation is also important, so investors should note that ALL has a Forward P/E ratio of 11.11 right now. This represents a discount compared to its industry's average Forward P/E of 14.57.

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. Insurance - Property and Casualty stocks are, on average, holding a PEG ratio of 1.56 based on yesterday's closing prices.

The Insurance - Property and Casualty industry is part of the Finance sector. This group has a Zacks Industry Rank of 34, putting it in the top 14% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

To follow ALL in the coming trading sessions, be sure to utilize Zacks.com.


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