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Will Allstate (ALL) Q2 Earnings Beat on Higher Premium?

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The Allstate Corp. ALL is scheduled to report second-quarter 2021 earnings on Aug 4, after market close. The company fared well in the first quarter, beating estimates by 58.7% on the back of premium growth and lower expenses, courtesy of its cost-saving measures.

Q2 Earnings Expectation

The Zacks Consensus Estimate for earnings of $2.99 per share implies a 21.54% increase from the prior-year quarter’s reported number.

Factors to Impact Q2 Results

Revenue and policy growth is likely to have been driven by the acquisition of National General, which was completed in the first quarter. The deal enhances Allstate's market share in independent agent channel. So apart from improving the company's independent agent business, National General expands its product portfolio. It includes nonstandard auto insurance where Allstate had negligible presence.

The company also fortified its footprint in lender-placed homeowners insurance, accident and health insurance and the digital marketing area.This new non-standard business along with the already strong standard insurance business might have driven revenues in the to-be reported quarter.

Allstate’s Service Businesses revenues are likely to have improved on higher policies in force, largely owing to growth in Allstate Protection Plans. The company successfully expanded the total addressable market into appliances, furniture, cellular carriers and its international markets with revenue recognition from each of these areas.

The combination of attractive unit economics, scalable technology platform and the power of The Allstate brand is expected to have led to a protection plan business with continued profitable growth, which is likely to reflect on the to-be-reported results.

While the top line is likely to have boosted growth, Allstate's exposure to property and casualty business makes it vulnerable to weather-related loss known as catastrophe losses. On an after-tax basis, a $752-million headwind is expected to have hurt the bottom line in the form of bad weather claims in the second quarter.

Share buyback made by the company in the to-be-reported quarter is likely to have aided its bottom line.

Earnings Surprise History

The company’s earnings beat estimates in all the trailing four quarters, the average being 51.92%.

The Allstate Corporation Price and EPS Surprise

The Allstate Corporation Price and EPS Surprise
The Allstate Corporation Price and EPS Surprise

The Allstate Corporation price-eps-surprise | The Allstate Corporation Quote

Here is what our quantitative model predicts:

Our proven model predicts an earnings beat for Allstate this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of beating estimates. And this is just the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Earnings ESP: Allstate has an Earnings ESP of +1.35%.

Zacks Rank: Allstate currently has a Zacks Rank #3.

Other Stocks to Consider

Some other stocks worth considering from the insurance space with a perfect mix of elements to surpass earnings estimates in the upcoming quarterly releases are as follows:

Unum Group UNM has an Earnings ESP of +0.67% and a Zacks Rank of 3, currently. You can see the complete list of today’s Zacks #1 Rank stocks here.

NMI Holdings Inc. NMIH has an Earnings ESP of +3.56% and a Zacks Rank of 3 at present.

American International Group, Inc. AIG has an Earnings ESP of +7.56% and a Zacks Rank #2, currently.


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American International Group, Inc. (AIG) : Free Stock Analysis Report

The Allstate Corporation (ALL) : Free Stock Analysis Report

Unum Group (UNM) : Free Stock Analysis Report

NMI Holdings Inc (NMIH) : Free Stock Analysis Report

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