BMO Capital Markets has adjusted its outlook on Allstate (NYSE:ALL) shares, increasing the price target to $205 from the previous $191, while maintaining an Outperform rating.
The revision follows the recent earnings per share (EPS) reports that provide further insights into Allstate's and MediaAlpha's marketing and transformation strategies.
The analyst at BMO Capital Markets expressed confidence in Allstate's potential for organic growth, anticipating that it will surpass consensus expectations. This optimism is based on the additional information disclosed in last week's earnings reports.
Allstate reported a net income of $301 million in the second quarter of 2024, demonstrating resilience despite elevated catastrophes. The company's auto profit improvement plan and the acquisition of National General significantly contributed to these results, showing profitable growth. Allstate's homeowners business also saw an improved underlying combined ratio and underwriting profit, while its net investment income rose by nearly 17% year-over-year.
Allstate is advancing its Transformative Growth strategy, aiming to establish a low-cost digital insurer with broad distribution. This strategy has seen success, especially with the expansion of the independent agent channel post-acquisition. The company also reported growth in their Protection Services business, particularly in Allstate Protection Plans, highlighting their operational execution and financial health.
However, bearish highlights included a decrease in total protection auto policies enforced by 1.6% year-over-year. Additionally, Allstate brand auto policies in force dropped by 4.5%, partially offset by National General's growth. Roadside business revenues also fell by 22.7% due to the exit from an unprofitable wholesale account.
InvestingPro Insights
As Allstate (NYSE:ALL) garners a bullish outlook from BMO Capital Markets, InvestingPro data and tips provide additional context for investors considering the company's prospects. With a market capitalization of $45.4 billion and a robust P/E ratio of 16.08, Allstate shows a stable valuation in the insurance industry. Its revenue has grown by 10.4% over the last twelve months as of Q2 2024, reflecting the company's successful execution of its growth strategies. Moreover, Allstate's dividend reliability is highlighted by a 13-year streak of dividend increases, signaling a commitment to returning value to shareholders.
InvestingPro Tips further reveal that analysts expect net income growth for Allstate this year, with seven analysts having revised their earnings upwards for the upcoming period. This aligns with the confidence expressed by BMO Capital Markets regarding Allstate's potential to exceed consensus expectations. Additionally, Allstate's prominent position in the insurance industry and its profitability over the last twelve months support the optimistic view.
For those interested in delving deeper into Allstate's performance and future outlook, InvestingPro offers additional insights, with more tips available at https://www.investing.com/pro/ALL. These tips can provide investors with a more comprehensive understanding of the company's financial health and strategic positioning.
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