The Allstate Corporation ( ALL ) has already pulled off an impressive turnaround in 2023-24. Allstate has been benefiting from sustainably higher premiums and stronger expense control. While some of the earnings rebound is structural and sustainable, some aspectsI am a stock analyst with over 20 years of experience in quantitative research, financial modeling, and risk management. My focus is on equity valuation, market trends, and portfolio optimization to uncover high-growth investment opportunities. As a ...

I rate Allstate ( ALL ) a buy based on a Quality-Value edge. My thesis is focusing on the decoupling of underwriting margins from industry cycles through the ALLIE AI ecosystem. This ecosystem has compressed the actuarial latency in pricing risk. The autoAnalyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not ...

Key Takeaways ALL delivers strong premium expansion via rate hikes, along with underwriting discipline.Allstate's investment income surged on higher yields, portfolio growth and performance-based returns.ALL's Protection Services revenues grew double digits, adding diversification and revenue potential.The Allstate Corporation (ALL) is well-positioned to sustain growth as disciplined pricing actions, steady premium expansion, an expanding Protection Services business and improving investment income strength ...

Group 1 - The Allstate Corporation is considered one of the best large cap value stocks to buy in 2026, with Mizuho raising its price target to $255 from $254 while maintaining an Outperform rating [1] - Wells Fargo also increased its price target on Allstate to $223 from $216, maintaining an Equal Weight rating, and emphasized the importance of pricing strategies, loss trends, and reserve levels for property & casualty companies [2] - TD Cowen downgraded Allstate to Hold from Buy, raising its price target to $231 from $224, citing intensifying competition for personal auto policies and a declining number of exclusive agents as growth headwinds [3] Group 2 - Allstate provides property and casualty, and other insurance products in the US and Canada, but certain AI stocks are believed to offer greater upside potential with less downside risk [4]

Core Insights - The presentation outlines the top 10 stock picks for 2026, emphasizing strong performance in previous years and the potential for continued growth in the current market environment [10][99]. Market Overview - The financial markets experienced significant volatility in 2025, with technology stocks rising by 25% and communication services by 22%, while consumer staples finished in the red [13][12]. - The S&P 500 saw a decline of nearly 20% at one point, with the top stocks for 2025 down more than 20% before rebounding to finish up close to 45% [14][23]. - Gold reached historic highs during this period, driven by global economic uncertainties and increased central bank purchases [15]. AI and Technology Sector - The AI sector played a crucial role in market dynamics, with the "Mag 7" stocks trading at a forward P/E of 31x compared to the S&P 493 at 22x, indicating a significant premium for AI-driven companies [16][17]. - Hyperscalers like Amazon, Google, and Microsoft have increased their capital expenditures on AI infrastructure, raising concerns about the return on investment for these projects [18]. Stock Performance and Recommendations - Micron Technology (MU) is highlighted as a top pick with a market cap of $355 billion, showing a 254% increase over the past year and strong growth metrics [40][41]. - Advanced Micro Devices (AMD) has a market cap of $363 billion and a one-year return of 70%, with improved valuation metrics [52][53]. - Ciena Corporation (CIEN) has a market cap of $34 billion and a one-year return of 166%, with strong analyst revisions indicating positive sentiment [58][59]. - Celestica (CLS) and Coherent (COHR) are also noted for their strong growth and profitability metrics, with significant year-over-year returns [65][69]. Financial Sector Insights - Allstate Corporation (ALL) has a market cap of $53 billion and is focusing on AI underwriting, showing strong EPS growth of 99% year-over-year compared to the financial sector's 14% [72][76]. - Incyte Corporation (INCY) is recognized for its positive earnings and diverse pipeline in biotechnology, with a market cap of $19 billion [81][84]. Mining and Industrial Sector - Barrick Mining Corporation (B) has a market cap of $16 billion and is diversifying into copper, with a forward EPS growth rate of 46% [86][90]. - Willdan Group (WLDN) has a market cap of $1.57 billion and shows strong growth metrics, with a 61% EPS diluted growth rate [91][94]. - ATI has a market cap of $16 billion and is noted for its profitability improvements and strong analyst revisions [95][98].

Core Insights - The presentation outlines the top 10 stock picks for 2026, emphasizing strong performance in previous years and the potential for continued growth in the current market environment [10][99]. Market Overview - The financial markets experienced significant volatility in 2025, with technology stocks rising by 25% and communication services by 22%, while consumer staples finished in the red [13][12]. - A notable correction occurred from February to April 2025, where top stocks were down more than 20% at one point but rebounded to finish up close to 45% for the year [14][23]. - Gold reached historic highs during this period, indicating a safe haven for investors amid market corrections [15]. AI and Technology Sector - The AI frenzy significantly influenced market dynamics, with the "Mag 7" stocks trading at a forward P/E of 31x compared to the S&P 493 at 22x, indicating a premium for AI-driven companies [16][17]. - Hyperscalers like Amazon, Google, and Microsoft have increased their capital expenditures on AI infrastructure, raising concerns about the return on investment [18]. - The market saw a sharp decline in late January 2025 due to fears of overvaluation in AI stocks, leading to significant drops in major indices [22][29]. Stock Performance - The top 10 stocks for 2025 achieved a 45.68% return, significantly outperforming the S&P 500, which was up 17.6% [37]. - Historical performance shows that holding the top stocks from 2023 to 2025 would have yielded a 187% return compared to the S&P 500's 85% [39]. Top Stock Picks for 2026 - **Micron Technology (MU)**: Market cap of $355 billion, ranked 1 in the IT sector, with a one-year return of 254% and strong growth metrics [40][41]. - **Advanced Micro Devices (AMD)**: Market cap of $363 billion, ranked 17 in IT, with a one-year return of 70% and improving valuation metrics [52][53]. - **Ciena Corporation (CIEN)**: Market cap of $34 billion, ranked 3 in IT, with a one-year return of 166% and strong analyst revisions [58][59]. - **Celestica (CLS)**: Market cap of $34 billion, ranked 5 in IT, with a one-year return of 191% and strong growth indicators [65][66]. - **Coherent (COHR)**: Market cap of $33 billion, ranked 8 in IT, with strong growth metrics and a history of consistent earnings beats [69][70]. - **Allstate Corporation (ALL)**: Market cap of $53 billion, ranked 15 in financials, with strong EPS growth and undervalued compared to the sector [72][75]. - **Incyte Corporation (INCY)**: Market cap of $19 billion, ranked 19 in healthcare, with a one-year return of 42% and strong growth potential [81][84]. - **Barrick Mining Corporation (B)**: Market cap of $X billion, ranked 4 in materials, with a one-year return of 186% and strong cash flow [86][90]. - **Willdan Group (WLDN)**: Market cap of $1.57 billion, ranked 5 in industrials, with a one-year return of 190% and strong growth metrics [91][94]. - **ATI (ATI)**: Market cap of $16 billion, ranked 4 in industrials, with a one-year return of 114% and improving profitability [95][98]. Growth Metrics - The average forward revenue growth rate for the top 10 stocks is 20%, with an average EPS growth rate of 73%, significantly higher than the S&P 500's 6% revenue growth and 10% EPS growth [100].

Core Insights - The Allstate Corporation reported estimated catastrophe losses of $80 million for December, translating to $64 million after-tax, with total catastrophe losses for Q4 amounting to $209 million or $165 million after-tax [1] Group 1: Catastrophe Losses - Estimated catastrophe losses for December were $80 million, or $64 million after-tax [1] - Total catastrophe losses for the fourth quarter reached $209 million, or $165 million after-tax [1] Group 2: Policy Counts - Allstate Protection policies in force as of December 31, 2025, totaled 38,275,000, reflecting a 0.2% increase from November 2025 and a 2.0% increase from December 2024 [1] - Auto policies in force were 25,504,000, up 0.2% from November 2025 and 2.3% from December 2024 [1] - Homeowners policies in force were 7,697,000, showing a 0.3% increase from November 2025 and a 2.5% increase from December 2024 [1] - Other personal lines policies in force were 4,898,000, down 0.1% from November 2025 and up 0.6% from December 2024 [1] - Commercial lines policies in force were 176,000, up 0.6% from November 2025 but down 17.4% from December 2024 [1]

Core Viewpoint - Aristocrat Leisure Limited and Light & Wonder have reached a settlement regarding litigation over intellectual property claims related to game development, specifically concerning the Dragon Train and Jewel of the Dragon games [1][5]. Summary by Sections Settlement Details - The settlement includes Light & Wonder compensating Aristocrat USD $127.5 million (approximately AUD $190 million) for claims of misappropriation and infringement of intellectual property [5]. - Light & Wonder acknowledges the use of certain Aristocrat math information in the development of the contested games and has agreed to cease their commercialization globally [5]. - Both companies have agreed to confidential procedures for addressing any future issues related to the use of Aristocrat's math in existing and developing games [5]. Company Statements - Aristocrat's CEO emphasized the importance of protecting intellectual property for the company's ongoing success and welcomed the settlement as a positive outcome [2]. - Light & Wonder's CEO stated the company is committed to respecting competitors' intellectual property rights and has implemented measures to prevent similar issues in the future [3]. Industry Context - Both companies recognize the significant investment and innovation involved in game design and development, highlighting the need for protection of proprietary assets to ensure fair competition in the gaming industry [5].

Core Viewpoint - The property and casualty (P&C) reinsurance market is expected to experience "lacklustre margins" in 2026 due to price cuts during January 1 renewals and a softening trend for mid-year cycles [1] Group 1: Market Conditions - Increased capital in the reinsurance market is driven by two years of robust returns and higher alternative capacity, leading to heightened competition and downward pressure on pricing [3] - The LA wildfires in Q1 2025 increased reinsurance demand but did not significantly alter pricing trends, serving more as a tailwind for demand [3] - Global/European renewals in January 2025 and Japan/Asia renewals in April 2025 saw price cuts of approximately 5-15% [4] Group 2: Pricing Trends - Reinsurance prices are estimated to have declined by an additional 15-20% during the January 1, 2026 renewals, with expectations of continued softness through mid-year 2026 renewals [5] - Analysts project return on equity (ROE) for reinsurers to compress closer to 10% in 2026, although top-tier underwriters like ACGL and RNR may perform better [5] Group 3: Catastrophe Losses - The U.S. insurance industry is expected to incur catastrophe losses of around $5 billion in Q4 2025, a decrease from $10 billion in Q3 2025 and $30 billion in Q4 2024 [6] - Major drivers of U.S. catastrophe losses include severe convective storms, winter storms, and floods across various regions [7] - Primary insurers are anticipated to bear a significant portion of these losses due to higher attachment points and retentions [7] Group 4: Company-Specific Insights - Companies such as Allstate Corporation (ALL) and Progressive Corporation (PGR) reported catastrophe losses below initial estimates, prompting J.P. Morgan to revise their loss projections for Q4 2025 [8] - Among the companies analyzed, ALL and Travelers (TRV) are most exposed to U.S. catastrophe risk, while RenaissanceRe (RNR) and Arch Capital Group (ACGL) have the highest exposure among reinsurers [9] - AIG (American International Group) and Chubb (CB) are identified as the most exposed to international catastrophe losses [10]

Core Insights - The Allstate Corporation (ALL) is set to announce its fiscal Q4 earnings for 2025 on February 4, with a current market cap of $54.2 billion [1] Financial Performance - Analysts anticipate a profit of $8.72 per share for Q4 2025, reflecting a 13.7% increase from $7.67 per share in the same quarter last year [2] - For the current fiscal year ending in December, expected profit is $28.81 per share, a significant 57.3% rise from $18.32 per share in fiscal 2024, although a decline of 17% to $23.91 per share is projected for fiscal 2026 [3] - In Q3, Allstate reported total revenue of $17.3 billion, a 3.8% year-over-year increase, and an adjusted EPS of $11.17, which is a remarkable 185.7% improvement from the previous year [5] Market Performance - Over the past 52 weeks, ALL's stock has gained 9.2%, underperforming the S&P 500 Index's 17.1% return and the State Street Financial Select Sector SPDR ETF's 15.6% increase [4] - Following the Q3 results announcement, ALL's shares surged by 1.7% in the subsequent trading session, indicating positive investor sentiment [5] Analyst Ratings - Wall Street analysts maintain a "Moderate Buy" rating for ALL, with 13 out of 24 analysts recommending "Strong Buy," one suggesting "Moderate Buy," eight advising "Hold," and two indicating "Strong Sell" [6] - The mean price target for ALL is set at $240.64, suggesting a potential upside of 14.9% from current levels [6]