Keefe analysts maintain Allstate stock Outperform with $235 target
Investing.com
Published May 16, 2025 10:14AM ET
On Friday, Keefe, Bruyette & Woods reaffirmed their positive stance on Allstate Corporation (NYSE:ALL), maintaining their Outperform rating and $235.00 price target for the company's shares. The endorsement comes despite Allstate's announcement of substantial April catastrophe losses totaling $594 million, or $469 million after tax, which adds up to a year-to-date figure of $2.8 billion in losses.
The firm's analyst highlighted Allstate's continued deceleration in year-over-year decreases in auto policies in force (PIF), viewing the smaller reductions as a sign of potential positive growth in the number of policies. This operational improvement comes as Allstate maintains a GREAT financial health score of 3.17 on InvestingPro , with robust revenue growth of 11.49% over the last twelve months. The latest data shows an April year-over-year PIF decrease of just 0.1%, compared to 0.4% in March 2025, 0.9% in February 2025, and 1.3% in January 2025.
Despite the significant catastrophe losses reported for April, Keefe, Bruyette & Woods remains consistent with their second-quarter 2025 estimate (2Q25E) for catastrophe losses at $2.17 billion. This estimation leaves a margin for $1.58 billion in potential losses for the months of May and June.
The firm also maintains its earnings per share (EPS) estimates for 2025 and 2026 at $17.75 and $20.90, respectively. These projections assume a slightly higher growth in PIF and marginally smaller average premium increases than previously estimated.
The price target of $235, which is set at 11.0 times the firm's estimated 2026 earnings per share, reflects confidence in Allstate's future performance amidst the current challenges. The Outperform rating indicates that Keefe, Bruyette & Woods believes Allstate's stock will perform better than the overall market or its sector in the near future.
In other recent news, Allstate Corporation's first-quarter 2025 earnings report revealed mixed results, with the company surpassing revenue expectations by bringing in $16.5 billion, a significant increase from the projected $13.94 billion. However, Allstate's adjusted earnings per share (EPS) fell short of forecasts, reporting $3.53 compared to the anticipated $3.71. Analysts have responded to these developments with various adjustments to their outlooks. BMO Capital Markets maintained an Outperform rating and raised its price target for Allstate to $230, citing improved EPS projections for 2025 and 2026. Similarly, Keefe, Bruyette & Woods (KBW) increased its price target from $228 to $235, attributing the adjustment to Allstate's first-quarter performance and improved core loss ratios.
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Raymond James also raised its price target for Allstate to $250, maintaining a Strong Buy rating. The firm emphasized Allstate's anticipated growth in policies in force and improved underwriting results as key drivers for this revised outlook. Additionally, Allstate's strategic focus on expanding its insurance offerings and enhancing operational efficiency continues to support its competitive position in the market. Despite the EPS miss, analysts remain optimistic about Allstate's growth trajectory, particularly in the auto insurance segment. This sentiment is reflected in the maintained Outperform ratings from multiple analyst firms, indicating confidence in Allstate's ability to outpace the market in the near future.
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Written By: Investing.com
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