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On Tuesday, Raymond (NSE:RYMD) James reaffirmed its Strong Buy rating on Allstate (NYSE:ALL) shares with a steady price target of $240.00, representing a significant upside from the current trading price of $186.58. The firm’s analyst, Gregory Peters, provided insights into the rationale behind maintaining the rating and target. According to InvestingPro data, Allstate currently shows a GREAT financial health score, suggesting strong fundamentals despite recent challenges. Peters adjusted the operating EPS forecasts for 2025 and 2026 to $17.15 and $19.00, respectively, a decrease from the previous estimates of $18.90 and $19.50. These revisions were attributed to the financial impact of recent wildfire losses and increased expense ratios driven by higher advertising expenditures. InvestingPro analysis reveals that 10 analysts have revised their earnings downwards for the upcoming period, though the company maintains strong revenue growth of 12.28% over the last twelve months.
Furthermore, Raymond James has removed the benefit segment from its 2026 projections following Allstate’s divestiture of the Employer Voluntary Benefits and Group Health businesses. Despite these changes, the analyst’s outlook for Allstate remains positive, with expectations of high single-digit net premium written (NPW) growth through 2026. Additionally, Peters anticipates low to mid single-digit growth in policy in force (PIF) counts for home and auto insurance in 2025 and 2026.
The affirmation of the Strong Buy rating and the $240.00 price target by Raymond James indicates their confidence in Allstate’s long-term performance despite the near-term adjustments to earnings estimates and the strategic business sale. The adjustments to the EPS estimates reflect the company’s current financial challenges and strategic decisions, while the overall positive growth expectations suggest a stable outlook for the insurance provider. Notably, InvestingPro data shows that Allstate has maintained dividend payments for 32 consecutive years and appears undervalued based on its Fair Value analysis. For deeper insights into Allstate’s valuation and growth prospects, investors can access the comprehensive Pro Research Report, available exclusively to InvestingPro subscribers.
Investors in Allstate shares are thus presented with a comprehensive view of the company’s financial prospects, balancing the immediate impacts of increased costs and business segment changes with a sustained growth trajectory in key performance indicators over the next few years.
In other recent news, Allstate Corporation ’s fourth-quarter earnings report has been a significant focus point, with the company posting adjusted earnings per share of $7.67, and revenue hitting the $16.5 billion mark. These figures exceeded analyst expectations, marking an 11.3% increase year over year. Furthermore, Allstate’s net income applicable to common shareholders rose to $1.9 billion in Q4 2024, up from $1.5 billion in the prior year quarter.
Analysts from Keefe, Bruyette & Woods have shown confidence in Allstate by increasing the price target from $235.00 to $240.00, while retaining an Outperform rating. This decision was based on the company’s financial performance and future prospects, including quicker net investment income growth and reduced core loss ratios. Meanwhile, CFRA analyst Catherine Seifert upgraded Allstate’s stock rating from ’Buy’ to ’Strong Buy’, maintaining a price target of $230.00.
BMO Capital Markets reiterated their Outperform rating on Allstate shares with a steady price target of $222.00, pointing to a solid margin and policy-in-force figures that surpassed expectations. On the other hand, Morgan Stanley (NYSE:MS) updated its outlook on Allstate shares, raising the price target slightly from $228.00 to $229.00, while reaffirming an Overweight rating on the stock. These adjustments and ratings reflect the analysts’ positive outlook on Allstate’s ability to grow earnings and deliver value to shareholders.
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