Core Insights - Three stocks with strong growth characteristics and buy ranks are highlighted for investors to consider on December 17 [1][2][3] Company Summaries - **The Allstate Corporation (ALL)**: - Zacks Rank: 1 - Current year earnings estimate increased by 22.7% over the last 60 days - PEG ratio: 0.40 (industry average: 1.75) - Growth Score: B [1] - **Great Lakes Dredge & Dock Corporation (GLDD)**: - Zacks Rank: 1 - Current year earnings estimate increased by 7.8% over the last 60 days - PEG ratio: 1.06 (industry average: 3.11) - Growth Score: A [2] - **Alarm.com Holdings, Inc. (ALRM)**: - Zacks Rank: 1 - Current year earnings estimate increased by 5.5% over the last 60 days - PEG ratio: 1.62 (industry average: 2.83) - Growth Score: B [3]

Core Viewpoint - Morgan Stanley downgraded Allstate to Equalweight from Overweight and lowered its price target to $215 due to a more competitive operating environment and a maturing investment thesis [1] Group 1: Investment Thesis - The previous investment case for Allstate, which was based on attractive valuation, improving growth, and margins exceeding consensus expectations, has largely played out [2] - Steady earnings from Allstate's homeowners insurance business are expected to provide some support in 2026, but rising competition necessitates a neutral stance [2] Group 2: Price Target and Valuation - Morgan Stanley reduced its price target to $215 per share, applying an estimated 8.9x price-to-earnings multiple to projected 2027 earnings per share of $24.07, reflecting a softening auto underwriting cycle [3] - The new target implies an estimated 1.6x price-to-book valuation, excluding AOCI, based on a projected 2027 operating return on equity of 18.5% [3]

Core Insights - Three stocks with strong growth characteristics and buy ranks are highlighted for investors to consider on December 15 Company Summaries The Allstate Corporation (ALL) - The company has a Zacks Rank of 1 - The Zacks Consensus Estimate for current year earnings has increased by 23.1% over the last 60 days - Allstate has a PEG ratio of 0.39 compared to the industry average of 1.75 - The company possesses a Growth Score of B [1] Great Lakes Dredge & Dock Corporation (GLDD) - The company also carries a Zacks Rank of 1 - The Zacks Consensus Estimate for current year earnings has increased by 7.8% over the last 60 days - Great Lakes Dredge & Dock has a PEG ratio of 1.05 compared to the industry average of 3.08 - The company possesses a Growth Score of A [2] Alarm.com Holdings, Inc. (ALRM) - This company holds a Zacks Rank of 1 - The Zacks Consensus Estimate for current year earnings has increased by 5.5% over the last 60 days - Alarm.com has a PEG ratio of 1.64 compared to the industry average of 2.94 - The company possesses a Growth Score of B [3]

Core Viewpoint - Allstate is expected to show positive earnings growth in its upcoming financial results, with analysts projecting earnings of $8.05 per share and revenue of $17.63 billion, indicating year-over-year increases of 4.95% and 5.53% respectively [2] Group 1: Recent Performance - Allstate's stock closed at $206.82, reflecting a +2.8% increase from the previous day, outperforming the S&P 500's gain of 0.21% [1] - Over the past month, Allstate shares have declined by 3.83%, underperforming the Finance sector's gain of 1.99% and the S&P 500's gain of 0.89% [1] Group 2: Earnings and Revenue Estimates - For the full year, analysts expect Allstate to achieve earnings of $28.21 per share and revenue of $68.95 billion, representing increases of +53.98% and +7.19% respectively compared to the previous year [3] - The Zacks Consensus EPS estimate has increased by 6.49% in the past month, indicating positive sentiment among analysts regarding Allstate's business operations [6] Group 3: Valuation Metrics - Allstate currently has a Forward P/E ratio of 7.13, which is lower than the industry average Forward P/E of 11.28, suggesting a valuation discount [7] - The company has a PEG ratio of 0.38, significantly below the industry average PEG ratio of 1.6, indicating favorable growth expectations relative to its valuation [8] Group 4: Industry Context - Allstate operates within the Insurance - Property and Casualty industry, which is part of the Finance sector and holds a Zacks Industry Rank of 28, placing it in the top 12% of over 250 industries [9]

Group 1 - The article does not provide any relevant content regarding the company or industry [1]

Group 1 - The core focus of the discussion is on Allstate's strategy regarding Property-Liability margins, growth in the Property-Liability business, and the integration of artificial intelligence to enhance shareholder value [2][3] - Allstate's strategy consists of two main components: increasing market share in personal Property-Liability and expanding protection offerings to customers [3]

Summary of Allstate Corporation Conference Call (December 10, 2025) Company Overview - **Company**: Allstate Corporation (NYSE: ALL) - **Industry**: Property and Casualty Insurance Key Points Financial Performance - Property liability premiums increased to **$56.8 billion**, an **8.2%** increase year-over-year [2] - Net investment income rose to **$3.4 billion**, an **18%** increase [2] - Net income reached **$8.3 billion**, over **100%** increase from the previous year [2] - Adjusted net income was **$7.6 billion**, a **72.8%** increase [2] - Return on equity stood at **34.7%** [2] - Total shareholder return was slightly over **15%** [2] - Price-earnings ratio at **7.4**, significantly below market averages [2] Market Position and Strategy - Allstate aims to increase personal property liability market share and expand protection offerings [2] - The personal property liability market exceeds **$500 billion** in premiums, with significant competition [3] - Allstate's auto insurance combined ratio was **97.1**, below the industry average, indicating strong profitability [4] - Homeowners insurance combined ratio was **92.3**, outperforming many competitors [5] - Market share in auto insurance increased from **9.3%** to **10.2%** since 2019 [6] - Homeowners insurance market share also increased to **8%** [6] Growth Initiatives - Transformative growth plan initiated in 2019 includes five components aimed at increasing market share [6] - Significant cost reductions allowed for competitive pricing while maintaining returns [6] - Distribution expanded through acquisitions and new product launches [7] - Marketing investments increased to **$2.2 billion**, up from **$900 million** in 2019 [8] - New products launched in **42 states** for auto and **24 states** for homeowners insurance [8] Artificial Intelligence and Technology - Allstate is developing a large language intelligence ecosystem called ALI to enhance customer service and operational efficiency [11] - Generative AI is being utilized for billing, software coding, and financial work [11] - Future plans include agentic AI to improve customer interactions and analytics [11] Competition and Market Dynamics - Competition in auto insurance remains intense, particularly from Progressive and State Farm [14] - GEICO has lost market share due to previous poor business decisions [15] - Allstate's multi-channel approach positions it well against competitors [16] Retention and Customer Value - Retention rates have declined over the past five years, influenced by significant price increases [19] - Strategies are in place to improve retention by enhancing customer value and reducing prices for millions of customers [22][23] - Bundling of auto and home insurance is being emphasized to improve retention [29] Future Outlook - Allstate expects policy growth to continue in 2026, despite competitive pressures [12] - The company is focused on maintaining profitability while growing market share [31] - Plans to further reduce expenses and improve operational efficiency through technology [35][36] Capital Management - Allstate maintains a favorable capital position, with a focus on organic growth and potential share repurchases [39] - The company has successfully executed acquisitions that have significantly increased premium volumes [41][42] Conclusion - Allstate is positioned for sustainable growth through strategic initiatives, technological advancements, and a focus on customer value, despite competitive challenges in the insurance market [12][39]

Industry Overview - The Property and Casualty (P&C) insurance sector is expected to benefit from improved pricing, prudent underwriting, increased exposure, and a strong capital position, ranking in the top 12% of the Zacks Industry Rank [1] - The industry is projected to outperform the market over the next three to six months due to these favorable conditions [1] Technological Advancements - Insurers are heavily investing in technology, with an expected generation of approximately $4.7 billion in annual global premiums from AI-related insurance by 2032, reflecting a CAGR of nearly 80% [2] - The adoption of technologies such as blockchain, AI, advanced analytics, telematics, and insurtech solutions is enhancing efficiency and reducing costs for P&C insurers [2] Company Highlights The Travelers Companies Inc. (TRV) - TRV has a strong market presence in auto, homeowners', and commercial property-casualty insurance, with a high retention rate and positive renewal premium changes [6] - Expected revenue and earnings growth rates for TRV are 3.4% and 6.7%, respectively, for the next year, with a 1.5% improvement in earnings estimates over the last 30 days [8] RenaissanceRe Holdings Ltd. (RNR) - RNR is experiencing steady premium growth, with a projected 5.4% year-over-year growth in net premiums earned in 2025 [10] - Expected revenue and earnings growth rates for RNR are -1.8% and 9.4%, respectively, for the next year, with a 0.9% improvement in earnings estimates over the last 30 days [11] The Allstate Corp. (ALL) - ALL is witnessing consistent premium growth, with a 7.6% year-over-year increase in net premiums earned in the first nine months of 2025 [12] - Expected revenue and earnings growth rates for ALL are 5.7% and -14.5%, respectively, for the next year, with a 5% improvement in earnings estimates over the last 30 days [14] Mercury General Corp. (MCY) - MCY is positioned for top-line growth due to sustained premium increases and a higher number of policies written [15] - Expected revenue and earnings growth rates for MCY are 6.7% and 23.5%, respectively, for the next year, with a 13.5% improvement in earnings estimates over the last 30 days [17] Hagerty Inc. (HGTY) - HGTY specializes in insurance services for collector cars and enthusiast vehicles, offering bundled memberships with various benefits [18][19] - Expected revenue and earnings growth rates for HGTY are 7.3% and -14.3%, respectively, for the next year, with a 6.1% improvement in earnings estimates over the last 30 days [20]

Core Insights - The Allstate Holiday Driver Report identifies hazardous winter driving periods and provides data-driven tips and tools for safer driving during the holiday season [1][2] Driving Risks and City Rankings - Allstate's analysis reveals that winter conditions significantly increase driving risks, with cities experiencing dramatic shifts in safety rankings from November to March [3][4] - Madison, Wisconsin, experiences the largest drop in safety ranking, falling 128 spots from 9th to 137th, while several Florida cities also see significant declines [4] Impact of Holiday Traffic - Warm-weather states, particularly Arizona and Florida, see a surge in out-of-state drivers during the holidays, with Phoenix traffic nearly doubling and Orlando increasing by 75% [5][6] - The increase in out-of-state drivers leads to unfamiliar routes and higher crash risks, emphasizing the need for careful planning [7] Peak Risk Behaviors - Risky driving behaviors peak during the holiday season, with phone use increasing by 10% on New Year's Eve, speeding rising by 10% the weekend before Christmas, and hard braking spiking on Christmas Eve [12][8] - December 26 is noted as the busiest day for roadside service events, highlighting the increased likelihood of breakdowns during this period [9] Allstate Mobile App Features - The Allstate mobile app offers tools such as crash detection and safe-driving insights to help drivers navigate winter conditions safely [10][11] - Recommendations for winter preparation include checking batteries, inspecting tires, and packing emergency kits to prevent breakdowns [10]

Financial Performance - Allstate's property-liability insurance premiums reached $56.839 billion, an increase of 8.2% year-over-year [4] - Net investment income increased by 18.4% to $3.390 billion [4] - Total revenues grew by 7.1% to $66.846 billion [4] - Net income applicable to common shareholders increased significantly by 100.9% to $8.261 billion [4] - Adjusted net income increased by 72.8% to $7.578 billion [4] - Adjusted net income return on equity was 34.7%, an increase of 8.6 percentage points [4] Market Share and Growth Strategy - Allstate is implementing a transformative growth plan initiated in 2019 to increase property-liability market share [9, 10] - The company increased marketing investments to $2.2 billion over the last 12 months, compared to $0.9 billion in 2019 [15] - Allstate has expanded distribution and product offerings, with new issued applications increasing significantly in exclusive agent (2x higher) and independent agent (2.4x higher) channels compared to 2019 [16] Operational Improvements - Allstate has reduced its adjusted expense ratio by 6.7 percentage points since 2018 [19] - The company has implemented a direct channel discount of 7-8% [19] Technology and Innovation - Allstate is leveraging its Large Language Intelligent Ecosystem (ALLIE) to enhance business performance, including a 45% reduction in policy billing inquiries [24, 25] - 15% of new coding is handled by AI [25] - 100% of claims adjuster emails are reviewed or generated by AI [25]