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Allstate Corp (ALL)
:ALL
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Allstate
(NYSE:ALL)
72Outperform
Positive Factors
Earnings
Allstate's 4Q24 result came in ahead of both forecast and consensus.
Growth Potential
Organic policy count growth is expected to beat expectations in the coming years, given a larger expense ratio budget to drive DTC and independent agency growth.
Profit Margins
The company has a realistic path to a low 90s combined ratio, which suggests improved profitability.
Negative Factors
Advertising Costs
There are higher California Wildfire losses in 2025, a higher auto expense ratio run rate due to higher advertising, and lower net investment income.
Natural Disasters
The company expects to incur $1.1bn in pre-tax losses related to the California wildfires.
Stock Performance
Allstate's stock is underperforming despite a solid margin print and PIF that was better than feared, perhaps due to management being somewhat more cautious about continued lingering retention impacts in New York and Jersey.
Allstate (ALL) vs. S&P 500 (SPY)
Market Cap
$51.15B
Dividend Yield1.95%
Average Volume (3M)2.25M
Price to Earnings (P/E)11.4
Beta (1Y)0.45
Revenue Growth12.28%
EPS GrowthN/A
CountryUS
Employees55,000
SectorFinancial
Sector Strength79
IndustryInsurance - Property & Casualty
Share Statistics
EPS (TTM)16.99
Shares Outstanding265,026,060
10 Day Avg. Volume2,448,196
30 Day Avg. Volume2,246,947
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)0.85
Price to Cash Flow (P/CF)8.00
P/FCF Ratio8.00
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$229.77Price Target Upside20.43% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering15
Allstate Business Overview & Revenue Model
Company DescriptionThe Allstate Corporation, together with its subsidiaries, provides property and casualty, and other insurance products in the United States and Canada. The company operates through Allstate Protection; Protection Services; Allstate Health and Benefits; and Run-off Property-Liability segments. The Allstate Protection segment offers private passenger auto and homeowners insurance; specialty auto products, including motorcycle, trailer, motor home, and off-road vehicle insurance; other personal lines products, such as renter, condominium, landlord, boat, umbrella, and manufactured home and stand-alone scheduled personal property; and commercial lines products under the Allstate and Encompass brand names. The Protection Services segment provides consumer product protection plans and related technical support for mobile phones, consumer electronics, furniture, and appliances; finance and insurance products, including vehicle service contracts, guaranteed asset protection waivers, road hazard tire and wheel, and paint and fabric protection; roadside assistance; device and mobile data collection services; data and analytic solutions using automotive telematics information; and identity protection services. This segment offers its products under various brands including Allstate Protection Plans, Allstate Dealer Services, Allstate Roadside Services, Arity, and Allstate Identity Protection. The Allstate Health and Benefits provides life, accident, critical illness, short-term disability, and other health insurance products. The Run-off Property-Liability offers property and casualty insurance. It sells its products through call centers, agencies, financial specialists, independent agents, brokers, wholesale partners, and affinity groups, as well as through online and mobile applications. The Allstate Corporation was founded in 1931 and is based in Northbrook, Illinois.
How the Company Makes MoneyAllstate makes money primarily through the underwriting and investment of insurance products. The company's key revenue streams include premiums earned from policyholders for various types of insurance coverage such as auto, homeowners, and life insurance. Additionally, Allstate generates income through investment activities, utilizing the funds collected from premiums to invest in diversified portfolios of securities, which provide returns that contribute to the company's earnings. Significant partnerships with independent agents and digital distribution channels also play a crucial role in expanding their market reach and customer base, enhancing Allstate's revenue generation capabilities.
Allstate Financial Statement Overview
Summary
Allstate's financial performance is solid with revenue growth of 12.26% and improved net profit margin to 7.28% in 2024. The balance sheet is strong with no debt and a return on equity of 21.77%. Cash flow is robust with a significant increase and efficient cash generation. However, missing EBIT and EBITDA data limit a full analysis of operational efficiency.Income Statement
Allstate's revenue has shown positive growth, with a 12.26% increase from 2023 to 2024. The net profit margin improved significantly from a negative margin in 2023 to 7.28% in 2024, indicating a rebound in profitability. However, historical EBIT and EBITDA data are missing for 2024, limiting a full analysis of operating efficiency.75
Positive
Balance Sheet
The company's balance sheet is generally strong, with no outstanding debt in 2024, resulting in a debt-to-equity ratio of zero. The equity ratio stands at 19.21%, indicating a stable financial structure. However, the return on equity (ROE) improved to 21.77% in 2024, reflecting enhanced earnings power.65
Positive
Cash Flow
Allstate's free cash flow demonstrated robust growth, more than doubling from 2023 to 2024. The operating cash flow to net income ratio is strong at 1.91 for 2024, highlighting efficient cash generation relative to earnings. The free cash flow to net income ratio is also favorable, indicating healthy cash flow management.82
Very Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 64.11B | 57.09B | 51.41B | 50.59B | 44.79B | Gross Profit |
| 64.11B | 49.96B | 43.97B | 43.33B | 39.06B | EBIT |
| 6.22B | 0.00 | -1.47B | 716.00M | 5.89B | EBITDA |
| 0.00 | 703.00M | -807.00M | 7.57B | 7.59B | Net Income Common Stockholders |
| 4.67B | -188.00M | -1.36B | 5.16B | 5.58B |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 704.00M | 722.00M | 736.00M | 763.00M | 311.00M | Total Assets |
| 111.62B | 103.36B | 97.99B | 99.44B | 125.99B | Total Debt |
| 7.49B | 7.59B | 7.21B | 7.98B | 7.83B | Net Debt |
| 6.78B | 6.87B | 6.48B | 7.21B | 7.51B | Total Liabilities |
| 90.25B | 85.73B | 80.63B | 74.31B | 95.77B | Stockholders Equity |
| 21.44B | 17.77B | 17.49B | 25.18B | 30.22B |
| Cash Flow | Free Cash Flow | |||
| 8.72B | 3.96B | 4.70B | 4.77B | 5.18B | Operating Cash Flow |
| 8.93B | 4.23B | 5.12B | 5.12B | 5.49B | Investing Cash Flow |
| -8.25B | -3.00B | -1.73B | 510.00M | -3.44B | Financing Cash Flow |
| -697.00M | -1.24B | -3.42B | -5.24B | -2.01B |
Allstate Technical Analysis
Negative
190.79
Price Trends
196.52
Negative
194.96
Negative
186.87
Positive
Market Momentum
3.62
Positive
58.43
Neutral
37.21
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ALL, the sentiment is Negative. The current price of 190.79 is below the 20-day moving average (MA) of 202.23, below the 50-day MA of 196.52, and above the 200-day MA of 186.87, indicating a neutral trend. The MACD of 3.62 indicates Positive momentum. The RSI at 58.43 is Neutral, neither overbought nor oversold. The STOCH value of 37.21 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for ALL.
Allstate Risk Analysis
Allstate disclosed 1 risk factors in its most recent earnings report. Allstate reported the most risks in the “Legal & Regulatory” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Allstate Peers Comparison
Overall Rating
UnderperformOutperform
Sector (64)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
82 Outperform | $21.08B | 9.27 | 17.61% | 2.45% | 13.22% | 24.83% | |
80 Outperform | $158.35B | 18.76 | 36.98% | 1.88% | 21.36% | 118.77% | |
78 Outperform | $114.04B | 12.54 | 15.01% | 1.68% | 11.78% | 4.39% | |
76 Outperform | $25.38B | 15.37 | 22.16% | 0.48% | 12.32% | 29.21% | |
75 Outperform | $56.21B | 11.56 | 18.94% | 1.69% | 12.23% | 68.50% | |
72 Outperform | $51.15B | 11.36 | 23.80% | 1.95% | 12.28% | ― | |
64 Neutral | $13.46B | 9.44 | 9.34% | 4.72% | 16.14% | -8.80% |
* Financial Sector Average
Performance Comparison
ALL
Allstate
190.79
28.45
17.52%
CB
Chubb
282.34
40.99
16.98%
CINF
Cincinnati Financial
131.60
15.34
13.19%
PGR
Progressive
273.18
74.98
37.83%
TRV
Travelers Companies
245.17
28.61
13.21%
WRB
W. R. Berkley Corporation
67.11
13.63
25.49%
Allstate Earnings Call Summary
Earnings Call Date: Feb 5, 2025 | % Change Since: -0.66% | Next Earnings Date: Apr 30, 2025
Earnings Call Sentiment Neutral
The earnings call reflects a strong financial performance with significant revenue and income growth, alongside successful strategic divestitures. However, challenges such as the impact of California wildfires and issues with auto insurance growth and retention present notable obstacles.Highlights
Strong Revenue Growth
Total revenues were $16.5 billion in the fourth quarter, up 11.3% compared to the prior year quarter. Revenues increased to $64.1 billion in 2024, with property liability earned premiums up 10.6% in the quarter and 11.2% for the full year.
Record Net Income and ROE
Net income of $1.9 billion in the fourth quarter and $4.6 billion for the full year. Adjusted net income return on equity was 26.8%.
Successful Underwriting and Investment Income
Property liability underwriting income improved by $507 million compared to the prior year. Net investment income was up 37.9% from the prior year.
Protection Plans Business Growth
Revenues of $528 million in the fourth quarter grew 20.3% from the prior year, driven by both domestic and international expansion, with adjusted net income of $37 million.
Strategic Asset Sales
The sale of group health and employee voluntary benefits businesses expected to generate $3.25 billion, representing attractive valuation multiples.
Lowlights
Impact of California Wildfires
Estimated gross losses of $2 billion due to wildfires, with net losses at $1.1 billion after reinsurance recoveries.
Challenges in Auto Insurance Growth
Auto insurance policies in force declined by 1.4% due to retention declines, despite a nearly 30% increase in new business applications.
Retention and Rate Challenges
Retention impacted by significant rate increases in states like New York, California, and New Jersey, with further rate actions needed in New York and New Jersey.
Company Guidance
During the Allstate Corporation's fourth quarter 2024 earnings call, the company reported strong financial performance with total revenues reaching $16.5 billion, marking an 11.3% increase from the previous year. The net income for the quarter was $1.9 billion, contributing to a full-year net income of $4.6 billion. The adjusted net income return on equity was an impressive 26.8%. The company's strategic sale of its group health and employee voluntary benefits is expected to generate $3.25 billion in proceeds. Throughout 2024, Allstate saw a 10.6% increase in property liability earned premiums for the quarter, and a 37.9% rise in net investment income compared to the previous year. The company also reported a fourth-quarter property liability underwriting income improvement of $507 million, underscoring successful execution of its auto insurance profit improvement plan. Despite challenges like the California wildfires, Allstate's strategic focus on transformative growth and operational efficiency contributed to its robust financial results and positioned the company for continued market share growth in 2025.Allstate Corporate Events
M&A TransactionsBusiness Operations and Strategy
Allstate Sells Group Health Business to Nationwide
Neutral
Jan 30, 2025
On January 30, 2025, Allstate Corporation announced a definitive Equity Purchase Agreement with Nationwide Life Insurance Company to sell its group health business, including Direct General Life Insurance Company, NSM Sales Corporation, and The Association Benefits Solution, LLC, for $1.25 billion in cash. This transaction is subject to regulatory approvals and standard closing conditions, potentially impacting Allstate’s operational focus and market positioning by divesting its group health segment.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.