We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Allstate (ALL) Q1 Earnings to Gain on Lower Tax, Investments
Read MoreHide Full Article
Allstate Corp. (ALL - Free Report) earnings for the first quarter to be reported on May 1, will gain from a decline in the tax rate to 19% to 20%, from a low 30% range earlier. Investments made in growth in many of its market facing businesses through marketing, distribution, telematics, new products and technology, should also yield results.
In 2018, Allstate brand Property-Liability, Allstate Benefits, SquareTrade and Esurance are all expected to contribute to growth, which should also be seen in the first quarter.
Within Ensurance, auto and homeowners insurance retention increased throughout 2017, and the trend is expected to continue in 2018. Naturally, the first quarter of 2018 may not be an exception.
Nevertheless, net premium has been declining at Encompass for the past two years. Decline in premium and policies in force in states with inadequate returns have impacted the overall top-line trends, to some extent. The business is getting smaller as the company exited unprofitable markets and raised prices. This will shrink top line from the segment and we don’t expect the segment to witness premium growth in the first quarter.
Then again, after suffering from declining income in its investment portfolio for the past many years, due to market volatility and low interest rates, the company is gradually gaining ground. Net investment income rose 11.8% in 2017, reflecting higher performance-based results and stable income from market-based portfolios. We expect further improvement in investment income with an increase in interest rates.
Earnings Surprise History
The company boasts an attractive earnings surprise history, having surpassed estimates in each of the trailing four quarters, with an average positive surprise of 58.04%. This is depicted in the chart below:
Our proven model indicates that chances of Allstate beating the Zacks Consensus Estimate is high as it has the right combination of the two key ingredients — positive Earnings ESP and a Zacks Rank #3 (Hold) or better.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter
Zacks ESP: The Earnings ESP for Allstate is +3.55%.
Zacks Rank: Allstate has a Zacks Rank #3, which increases the predictive power of ESP.
Other Stocks That Warrant a Look
Here are some companies that you may consider as our model shows that these have the right combination of elements to post an earnings beat this quarter:
National General Holdings Corp is expected to report first-quarter 2018 earnings results on May 7. The company has an Earnings ESP of +5.59% and a Zacks Rank #1.
American Equity Investment Life Holding Company has an Earnings ESP of +5.99% and a Zacks Rank #3. The company is expected to report first-quarter earnings results on May 2.
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
Image: Bigstock
Allstate (ALL) Q1 Earnings to Gain on Lower Tax, Investments
Allstate Corp. (ALL - Free Report) earnings for the first quarter to be reported on May 1, will gain from a decline in the tax rate to 19% to 20%, from a low 30% range earlier. Investments made in growth in many of its market facing businesses through marketing, distribution, telematics, new products and technology, should also yield results.
In 2018, Allstate brand Property-Liability, Allstate Benefits, SquareTrade and Esurance are all expected to contribute to growth, which should also be seen in the first quarter.
Within Ensurance, auto and homeowners insurance retention increased throughout 2017, and the trend is expected to continue in 2018. Naturally, the first quarter of 2018 may not be an exception.
Nevertheless, net premium has been declining at Encompass for the past two years. Decline in premium and policies in force in states with inadequate returns have impacted the overall top-line trends, to some extent. The business is getting smaller as the company exited unprofitable markets and raised prices. This will shrink top line from the segment and we don’t expect the segment to witness premium growth in the first quarter.
Then again, after suffering from declining income in its investment portfolio for the past many years, due to market volatility and low interest rates, the company is gradually gaining ground. Net investment income rose 11.8% in 2017, reflecting higher performance-based results and stable income from market-based portfolios. We expect further improvement in investment income with an increase in interest rates.
Earnings Surprise History
The company boasts an attractive earnings surprise history, having surpassed estimates in each of the trailing four quarters, with an average positive surprise of 58.04%. This is depicted in the chart below:
The Allstate Corporation Price and EPS Surprise
The Allstate Corporation Price and EPS Surprise | The Allstate Corporation Quote
Why a Likely Positive Surprise?
Our proven model indicates that chances of Allstate beating the Zacks Consensus Estimate is high as it has the right combination of the two key ingredients — positive Earnings ESP and a Zacks Rank #3 (Hold) or better.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter
Zacks ESP: The Earnings ESP for Allstate is +3.55%.
Zacks Rank: Allstate has a Zacks Rank #3, which increases the predictive power of ESP.
Other Stocks That Warrant a Look
Here are some companies that you may consider as our model shows that these have the right combination of elements to post an earnings beat this quarter:
American Financial Group, Inc. (AFG - Free Report) is expected to report first-quarter 2018 results on May 2. The company has an Earnings ESP of +4.46% and a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here
National General Holdings Corp is expected to report first-quarter 2018 earnings results on May 7. The company has an Earnings ESP of +5.59% and a Zacks Rank #1.
American Equity Investment Life Holding Company has an Earnings ESP of +5.99% and a Zacks Rank #3. The company is expected to report first-quarter earnings results on May 2.
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
See Zacks' 3 Best Stocks to Play This Trend >>