Allstate: In Good Hands

05/11/2017 2:50 am EST


Jason Clark

Contributing Editor, The Prudent Speculator

Allstate (ALL) reported Q1 financial results on Tuesday, with adjusted EPS coming in more than 50% above consensus analyst estimates, explains value specialist Jason Clark, contributing editor to The Prudent Speculator

For the three month period, the property and casualty insurance heavyweight said it earned $1.64 per share, versus forecasts of $1.06.

“We are off to a strong start in 2017 on both operating priorities and strategic initiatives,” said Chairman and CEO Tom Wilson. Shares of ALL were up almost 4% following the Q1 release.

We continue to see our confidence increasing in Allstate’s turnaround of its auto insurance business and we remain confident that the company is well-positioned for the long term, thanks to its vast distribution network, scale and resulting cost advantages, pricing sophistication and product design. 

Management has been returning capital to shareholders and we like that the stock trades for a reasonable multiple of slightly more than 13 times the next-twelve-months estimated earnings. We have again boosted our Target Price, which now is parked at $94.

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