S&P 500 may face selling pressure as systematic funds reach full exposure
On Wednesday, BMO Capital Markets maintained a positive outlook on Allstate Corporation (NYSE:ALL) shares, reiterating an Outperform rating and a $230.00 price target. According to InvestingPro data, this target aligns with the broader analyst consensus, as the stock currently trades at $202.16 with analyst targets ranging from $149 to $286. The company’s strong financial health score of "GREAT" supports this optimistic outlook. BMO Capital’s analyst provided insights into the insurance giant’s recent decision to report auto organic growth on a monthly basis. As a result of this new reporting cadence, BMO Capital has adjusted its forecasts, now projecting an increase of 1.1% quarter-over-quarter in auto policies in force (PIF) for the second quarter and a 2.9% rise for the full year 2025. These projections are slightly more optimistic than the consensus, surpassing it by 20 basis points for the second quarter and 40 basis points for the year.
The analyst explained that the updated model, which now utilizes monthly PIF data as opposed to quarterly, draws on historical trends from Progressive Corporation (NYSE:PGR) and anticipates Allstate’s customer retention rates to normalize and improve over time. This outlook is supported by Allstate’s robust financial metrics, with revenue growth of 11.5% over the last twelve months and a healthy market capitalization of $53.58 billion. Want to dive deeper into Allstate’s financial health metrics? Check out the comprehensive Pro Research Report, available exclusively on InvestingPro. This is expected to be slightly tempered by a shift in customer mix towards those with lower retention rates, such as those from National General Holdings (NASDAQ:NGHC) Corp. (NatGen), which Allstate acquired.
Allstate’s management had previously provided comments in the first quarter of 2025 earnings call, which were somewhat cautious with regards to advertising spending, customer retention, new application growth, and the focus on NatGen. However, the analyst highlighted that management did not indicate any significant increases in advertising expenditure or notable improvements in retention rates, nor did they suggest an acceleration in new applications from already strong levels.
The firm’s analysis suggests that despite the conservative commentary from Allstate’s management earlier in the quarter, the company’s monthly PIF trajectory supports a bullish stance as the second quarter progresses. This perspective is based on the detailed review of Allstate’s monthly disclosures and the broader industry context.
In summary, BMO Capital Markets’ stance on Allstate stock reflects confidence in the company’s growth trajectory, particularly in the auto insurance segment, as indicated by the maintained Outperform rating and $230.00 price target. The company’s strong fundamentals are further evidenced by its 14-year streak of dividend increases and current dividend yield of 2%. InvestingPro analysis suggests the stock is currently undervalued, with additional insights available through their detailed valuation models and 8 more exclusive ProTips.
In other recent news, Allstate reported its first-quarter 2025 earnings, revealing an adjusted earnings per share (EPS) of $3.53, which fell short of the forecasted $3.71. However, the company exceeded revenue expectations, bringing in $16.5 billion compared to the projected $13.94 billion. Following this, several analyst firms adjusted their price targets for Allstate. Raymond (NSE:RYMD) James raised its target to $250, maintaining a Strong Buy rating, citing Allstate’s robust growth and strategic capital management. Similarly, KBW increased its price target to $235, noting that Allstate’s performance exceeded expectations, leading to upward revisions in EPS estimates for 2025 and 2026. BMO Capital also raised its price target to $230, highlighting Allstate’s strong first-quarter performance and anticipated growth in policies. These developments reflect ongoing confidence in Allstate’s strategic positioning and financial trajectory.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.