Aallstate(US:ALL) ZACKSยท2024-12-27 16:30Core Viewpoint - Allstate Corporation (ALL) has demonstrated strong financial performance and significant growth potential, making it an attractive investment opportunity due to its undervaluation compared to industry peers [5][7]. Stock Performance - Over the past year, ALL shares have increased by 39.8%, outperforming the industry growth of 27.6% and competitors such as Aflac (AFL) at 26.2%, Aon (AON) at 24.9%, and American International Group (AIG) at 8.1% [2]. Earnings Estimates - The Zacks Consensus Estimate for Allstate's 2024 adjusted earnings is $16.27 per share, a significant increase from $0.95 in the previous year. The 2025 adjusted earnings estimate indicates a further growth of 17.8%. Revenue estimates for 2024 and 2025 suggest year-over-year growth of 12.1% and 7.1%, respectively [4]. Valuation Metrics - Allstate is currently trading at a forward price-to-earnings ratio of 10.23X, compared to the industry average of 27.94X, indicating that the stock is undervalued. The company holds a Value Score of B [7]. Growth Drivers - Revenue growth is driven by rising premiums from a diverse product portfolio, strategic acquisitions, and disciplined pricing. Net premiums earned increased by 13.9% in 2021, 8.7% in 2022, 10.4% in 2023, and 11.5% in the first nine months of 2024, with a projected increase of 11.3% for 2024 [9][10]. Strategic Initiatives - The company is divesting non-core operations to enhance profitability, including plans to sell its Employer Voluntary Benefits business by mid-2025. Cost-cutting measures are being implemented to improve efficiency and underwriting results, with a focus on using AI to enhance customer experience [11]. Cash Flow and Shareholder Returns - Allstate's operating cash flow more than doubled in the first nine months of 2024, with $719 million paid in dividends to common shareholders during the same period. The current dividend yield stands at 1.9%, significantly higher than the industry average of 0.3% [12].