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Why Is Allstate (ALL) Up 3.3% Since Last Earnings Report?
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A month has gone by since the last earnings report for Allstate (ALL - Free Report) . Shares have added about 3.3% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Allstate due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Allstate Q4 Earnings Beat on Health & Benefits Performance
The Allstate Corporation reported fourth-quarter 2021 adjusted earnings of $2.75 per share, which beat the Zacks Consensus Estimate by a penny. Yet, the bottom line plunged 46.9% year over year.
Fourth-quarter revenues of $13,011 million advanced 18.7% year over year and beat the Zacks Consensus Estimate of $11,006 million.
The better-than-expected fourth-quarter results were driven by an uptick in earned premiums stemming from National General and growth in the Allstate brand. Increased policies in force in Allstate Protection Plans and higher performance-based investment income from private equity investment were also major positives, partially offset by escalating costs and higher non-catastrophe losses in auto and homeowners insurance.
Operations
Total costs and expenses increased to $11,618 million from $8,098 million a year ago, primarily due to higher property and casualty insurance claims and claims expenses, accident and health insurance policy benefits, amortization of deferred policy acquisition costs, and operating costs and expenses.
Pre-tax income declined to $1,393 million from $2,864 million in the prior-year quarter.
As of Dec 31, 2021, total policies in force amounted to 191.9 million, up 9.8% from the prior-year comparable period.
Net investment income surged to $847 million for the fourth quarter from $660 million a year ago, attributable to improved performance-based income, thanks to gains from sales and private equity investment valuations.
Allstate incurred $528 million of catastrophe losses in the quarter under review, which increased 24.5% year over year.
Segmental Performances
Property-Liability insurance premiums written totaled $10,301 million, which advanced 19.7% year over year aided by contributions from National General inclusion and growth in the Allstate brand.
The segment generated an underwriting income of $113 million, which compares unfavorably with the year-ago quarter’s underwriting income of $1,423 million. Elevated non-catastrophe losses in auto and homeowners insurance coupled with higher prior-year non-catastrophe reserve re-estimates dampened the segment’s underwriting results, partly offset by improved premiums earned. The combined ratio deteriorated 1,490 basis points (bps) year over year to 98.9%.
Protection Services' revenues climbed 21.9% year over year to $606 million for the fourth quarter, courtesy of strong performance of Allstate Protection Plans, thanks to increased policies in force. Yet, adjusted net income declined 9% from the prior-year quarter to $29 million due to higher severity at Allstate Roadside.
Allstate Health and Benefits’ total premium and contract charges surged 75.2% year over year to $459 million. The substantial rise was due to the National General buyout, which led to the inclusion of group and individual health businesses. Adjusted net income jumped 41.2% year over year to $48 million for the fourth quarter.
Financial Update (as of Dec 31, 2021)
Allstate exited the fourth quarter with a cash balance of $763 million, which more than doubled from the 2020-end level of $311 million. Total assets of $99,440 million decreased 21.1% from the figure on Dec 31, 2020.
Long-term debt at quarter-end amounted to $7,976 million, up from the $7,825 million level at 2020-end. Total shareholders’ equity declined 16.7% from the 2020-end figure to $25,179 million. Long-term debt to capitalization was 24.1% at fourth quarter-end.
Capital Position (as of Dec 31, 2021)
Adjusted net income return on equity came in at 16.9%, which declined from 19.2% in 2020. Book value per share increased 10.9% from the prior-year quarter to $81.52 at fourth quarter-end.
Prudent Capital Deployment
Throughout 2021, the company rewarded shareholders to the tune of around $4.1 billion via share buybacks ($3.3 billion) and dividends ($885 million). The divestment of life and annuity businesses enabled Allstate to boost shareholder value.
Outlook
The advancement made by the personal property-liability business model is expected to help ALL generate higher growth on the back of lower expenses and extending customer access. The utilization of technology will likely enable the company to provide affordable, simple and connected protection to clients. Its strategic initiatives are likely to position the company to withstand the effect of inflation on auto insurance prices and returns.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended downward during the past month.
The consensus estimate has shifted -12.83% due to these changes.
VGM Scores
At this time, Allstate has a subpar Growth Score of D, though it is lagging a bit on the Momentum Score front with an F. However, the stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise Allstate has a Zacks Rank #5 (Strong Sell). We expect a below average return from the stock in the next few months.
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Why Is Allstate (ALL) Up 3.3% Since Last Earnings Report?
A month has gone by since the last earnings report for Allstate (ALL - Free Report) . Shares have added about 3.3% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Allstate due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Allstate Q4 Earnings Beat on Health & Benefits Performance
The Allstate Corporation reported fourth-quarter 2021 adjusted earnings of $2.75 per share, which beat the Zacks Consensus Estimate by a penny. Yet, the bottom line plunged 46.9% year over year.
Fourth-quarter revenues of $13,011 million advanced 18.7% year over year and beat the Zacks Consensus Estimate of $11,006 million.
The better-than-expected fourth-quarter results were driven by an uptick in earned premiums stemming from National General and growth in the Allstate brand. Increased policies in force in Allstate Protection Plans and higher performance-based investment income from private equity investment were also major positives, partially offset by escalating costs and higher non-catastrophe losses in auto and homeowners insurance.
Operations
Total costs and expenses increased to $11,618 million from $8,098 million a year ago, primarily due to higher property and casualty insurance claims and claims expenses, accident and health insurance policy benefits, amortization of deferred policy acquisition costs, and operating costs and expenses.
Pre-tax income declined to $1,393 million from $2,864 million in the prior-year quarter.
As of Dec 31, 2021, total policies in force amounted to 191.9 million, up 9.8% from the prior-year comparable period.
Net investment income surged to $847 million for the fourth quarter from $660 million a year ago, attributable to improved performance-based income, thanks to gains from sales and private equity investment valuations.
Allstate incurred $528 million of catastrophe losses in the quarter under review, which increased 24.5% year over year.
Segmental Performances
Property-Liability insurance premiums written totaled $10,301 million, which advanced 19.7% year over year aided by contributions from National General inclusion and growth in the Allstate brand.
The segment generated an underwriting income of $113 million, which compares unfavorably with the year-ago quarter’s underwriting income of $1,423 million. Elevated non-catastrophe losses in auto and homeowners insurance coupled with higher prior-year non-catastrophe reserve re-estimates dampened the segment’s underwriting results, partly offset by improved premiums earned. The combined ratio deteriorated 1,490 basis points (bps) year over year to 98.9%.
Protection Services' revenues climbed 21.9% year over year to $606 million for the fourth quarter, courtesy of strong performance of Allstate Protection Plans, thanks to increased policies in force. Yet, adjusted net income declined 9% from the prior-year quarter to $29 million due to higher severity at Allstate Roadside.
Allstate Health and Benefits’ total premium and contract charges surged 75.2% year over year to $459 million. The substantial rise was due to the National General buyout, which led to the inclusion of group and individual health businesses. Adjusted net income jumped 41.2% year over year to $48 million for the fourth quarter.
Financial Update (as of Dec 31, 2021)
Allstate exited the fourth quarter with a cash balance of $763 million, which more than doubled from the 2020-end level of $311 million. Total assets of $99,440 million decreased 21.1% from the figure on Dec 31, 2020.
Long-term debt at quarter-end amounted to $7,976 million, up from the $7,825 million level at 2020-end. Total shareholders’ equity declined 16.7% from the 2020-end figure to $25,179 million. Long-term debt to capitalization was 24.1% at fourth quarter-end.
Capital Position (as of Dec 31, 2021)
Adjusted net income return on equity came in at 16.9%, which declined from 19.2% in 2020. Book value per share increased 10.9% from the prior-year quarter to $81.52 at fourth quarter-end.
Prudent Capital Deployment
Throughout 2021, the company rewarded shareholders to the tune of around $4.1 billion via share buybacks ($3.3 billion) and dividends ($885 million). The divestment of life and annuity businesses enabled Allstate to boost shareholder value.
Outlook
The advancement made by the personal property-liability business model is expected to help ALL generate higher growth on the back of lower expenses and extending customer access. The utilization of technology will likely enable the company to provide affordable, simple and connected protection to clients. Its strategic initiatives are likely to position the company to withstand the effect of inflation on auto insurance prices and returns.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended downward during the past month.
The consensus estimate has shifted -12.83% due to these changes.
VGM Scores
At this time, Allstate has a subpar Growth Score of D, though it is lagging a bit on the Momentum Score front with an F. However, the stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise Allstate has a Zacks Rank #5 (Strong Sell). We expect a below average return from the stock in the next few months.