Should You Retain Allstate Stock in Your Portfolio Now?

Core Viewpoint - Allstate Corporation is positioned for growth due to rising premiums from rate increases in auto and home insurance, along with strategic acquisitions in its Protection Services business [1]. Group 1: Company Overview - Allstate has a market capitalization of $50.5 billion and operates primarily in the property and casualty insurance sector in the United States and Canada [1]. - The stock currently holds a Zacks Rank of 3 (Hold), indicating it is worth retaining at this time [1]. Group 2: Price Performance - Allstate's shares have increased by 71.5% over the past year, outperforming the industry and the S&P 500 Index, which grew by 34.1% and 34.2%, respectively [2]. - The current stock price is $191.25, close to its 52-week high of $193.97, reflecting strong investor confidence [2]. Group 3: Key Drivers - The company is effectively combating inflationary pressures and claim expenses in the auto insurance sector through strategic rate hikes [3]. - Management aims to enhance market share in auto insurance by improving offerings and customer experience, leveraging independent agents, and launching new products [3]. - Improved retention rates in both auto and homeowners insurance are expected to contribute to future growth [3]. Group 4: Earnings Estimates - The Zacks Consensus Estimate for Allstate's 2024 earnings is $15.20 per share, a significant increase from the previous year's $0.95 [5]. - The 2025 earnings estimate suggests an additional 18.1% year-over-year growth, with revenue growth projections of 11% for 2024 and 6.3% for 2025 [5]. Group 5: Key Concerns - Allstate's trailing 12-month price-to-book value is 3.02X, higher than the industry average of 1.62X, indicating potential overvaluation [6]. - The company's debt level stands at $8.1 billion, with a total debt to capital ratio of 30.3%, exceeding the industry average of 17.2% [6].