Morgan Stanley again adjusts its Fed forecast, now sees 4 cuts in 2026
On Friday, CFRA analyst Catherine Seifert upgraded Allstate’s stock rating from ’Buy’ to ’Strong Buy’, maintaining a price target of $230.00. Seifert’s valuation of Allstate (NYSE: ALL) shares is based on a multiple of 10.9 times the firm’s projected 2026 operating earnings per share (EPS) of $21.15 and 13.2 times the 2025 operating EPS estimate of $17.45. According to InvestingPro data, the stock currently trades at a P/E ratio of 11.1x, with analysts setting price targets ranging from $138 to $279.
Despite anticipating that Allstate’s first-quarter 2025 results will be affected by roughly $1.1 billion in pre-tax claims due to the California wildfires, Seifert considers this level of claims manageable for the company. Furthermore, she notes that Allstate has reduced its exposure to such events. The analyst acknowledges the concerns of investors regarding a potential increase in personal auto price competition following the improved underwriting profitability in 2024. However, Seifert believes that Allstate will maintain its pricing discipline in light of the various risks that continue to exist. InvestingPro analysis reveals the company maintains a strong financial health score of 3.25 out of 4, labeled as "GREAT," suggesting robust operational stability despite industry challenges.
Seifert suggests that the pricing actions and restructuring efforts Allstate has implemented over the past years have positioned the company to achieve growth and underwriting profitability that outperforms its peers. Supporting this view, InvestingPro data shows revenue growth of 12.3% in the last twelve months, with the company maintaining dividend payments for 32 consecutive years. She also points out that Allstate’s current yield of 1.9% could serve as a catalyst for the stock, with InvestingPro noting the company has raised its dividend for 14 consecutive years.
The price target of $230 reflects Seifert’s confidence in Allstate’s ability to navigate the challenges ahead while capitalizing on its strategic initiatives to deliver strong financial performance. Based on InvestingPro’s Fair Value analysis, the stock currently appears slightly undervalued, with additional insights and detailed valuation metrics available in the comprehensive Pro Research Report, part of the extensive analysis covering over 1,400 US equities.
In other recent news, Allstate Corporation (NYSE:ALL) reported fourth-quarter earnings that surpassed analyst estimates, with adjusted earnings per share of $7.67 and revenue of $16.5 billion, an 11.3% increase year-over-year. The company’s net income rose to $1.9 billion, up from $1.5 billion in the previous year’s quarter. These results were driven by improved underwriting results in its Property-Liability segment and higher investment income.
Furthermore, Allstate recently announced the sale of its Group Health business, a significant development suggesting a realignment towards its core operations. Additionally, the company’s strategic efforts to expand its Auto segment were highlighted as a key component of its future business strategy.
In the analyst arena, BMO Capital Markets reiterated their Outperform rating on Allstate shares with a steady price target of $222.00, emphasizing the company’s strong financial outcomes and positive margin figures. Meanwhile, Morgan Stanley (NYSE:MS) maintained an Overweight rating on Allstate’s stock, raising the price target slightly from $228.00 to $229.00. Both firms anticipate favorable results for Allstate in the coming years, driven by strategic initiatives and the company’s ability to navigate the changing insurance landscape. These are recent developments that investors should consider.
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