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Can Allstate (ALL) Q2 Earnings Beat Estimates on Premium Growth?
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The Allstate Corporation (ALL - Free Report) is set to report its second-quarter 2024 results on Jul 31, after the closing bell.
The Zacks Consensus Estimate for second-quarter earnings is currently pegged at 33 cents per share, implying an improvement of 107.5% from the year-ago reported number. The estimate remained stable over the past week. The Zacks Consensus Estimate for second-quarter revenues is currently pegged at $15.6 billion, suggesting a 10.1% rise from the year-ago actuals.
Image Source: Zacks Investment Research
ALL beat the consensus estimate for earnings in three of the trailing four quarters and missed once, with the average surprise being 41.9%, as you can see below.
Our proven model predicts a likely earnings beat for Allstate this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. That is precisely the case here, as you will see below.
Earnings ESP: The company has an Earnings ESP of +36.50%. This is because the Most Accurate Estimate currently stands at 46 cents per share, higher than the Zacks Consensus Estimate of 33 cents.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Allstate currently carries a Zacks Rank #3.
Now, let’s see how things have shaped up before the second-quarter earnings announcement.
Q2 Factors to Note
Allstate’s revenues are likely to have benefited on the back of improved net premiums earned from most of its lines of business, attributable to rate increases. We expect net premiums earned to grow almost 10% year over year in the second quarter.
Net investment income is anticipated to have received an impetus from improved yields from the fixed-income portfolio. The Zacks Consensus Estimate for net investment income indicates almost 20% year-over-year growth, while our model estimate suggests a 17% increase.
The Zacks Consensus Estimate for adjusted net income from the Protection Services business indicates a nearly 2% increase from the year-ago period. We expect total costs and expenses to have decreased in the second quarter by more than 4% due to lower claims.
The Auto insurance business is expected to have been aided by expanding earned premiums and lower expenses in the second quarter. The Zacks Consensus Estimate for Auto premiums earned indicates 12% growth from a year ago. Also, the combined ratio in this line of business is pegged at 99.72%, improving from 108.3% in the year-ago quarter. This means more portion of premiums remained in the company’s kitty following claim payments.
The factors stated above are likely to have positioned the company for not only year-over-year growth but also an earnings beat. However, the company earlier stated that its total catastrophe losses were $2.12 billion (pre-tax) in the second quarter due to several geographically widespread events.
Price Performance
Allstate's stock has gained 20.9% in the year-to-date period compared with the industry’s growth of 21.1%. Nevertheless, the stock outperformed the S&P 500 Index, which grew 14.8% during the same period.
YTD Price Performance
Image Source: Zacks Investment Research
What Should Investors Do Now?
Given the potential for continued growth in the Protection Services business and improving yields from the fixed-income portfolio, investors who already own the stock may want to hold it for now. Its improving benefit ratios and decreasing costs are expected to boost second-quarter profits. However, due to its rising debt burden and a decline in policies in force, new investors may want to monitor the upcoming earnings results closely and wait for a more favorable entry point.
Stocks to Consider
Here are some other companies from the broader Finance space, which, according to our model, also have the right combination of elements to beat on earnings this time around:
The Zacks Consensus Estimate for Palomar’s bottom line for the to-be-reported quarter is pegged at $1.12 per share, which increased by a penny over the past week. The estimate signals 30.2% year-over-year growth. The consensus estimate for PLMR’s revenues is pegged at $120.4 million, indicating a 34.9% increase from a year ago.
Oscar Health, Inc. (OSCR - Free Report) has an Earnings ESP of +3.23% and is a Zacks #3 Ranked player.
The Zacks Consensus Estimate for Oscar Health’s bottom line for the to-be-reported quarter is pegged at 16 cents per share, which signals a massive improvement from the year-ago loss of 7 cents. The consensus estimate for OSCR’s revenues is pegged at $2.2 billion, a 43.4% jump from a year ago. It beat earnings estimates in each of the past four quarters, with an average surprise of 62.3%.
Fidelity National Financial, Inc. (FNF - Free Report) has an Earnings ESP of +1.61% and a Zacks Rank of 3.
The Zacks Consensus Estimate for Fidelity National's bottom line for the to-be-reported quarter is pegged at $1.27 per share, suggesting a 25.7% year-over-year increase. The estimate remained stable over the past week. The consensus estimate for FNF’s revenues is pegged at $3.1 billion, predicting a 1.5% increase from the year-ago period.
Image: Bigstock
Can Allstate (ALL) Q2 Earnings Beat Estimates on Premium Growth?
The Allstate Corporation (ALL - Free Report) is set to report its second-quarter 2024 results on Jul 31, after the closing bell.
The Zacks Consensus Estimate for second-quarter earnings is currently pegged at 33 cents per share, implying an improvement of 107.5% from the year-ago reported number. The estimate remained stable over the past week. The Zacks Consensus Estimate for second-quarter revenues is currently pegged at $15.6 billion, suggesting a 10.1% rise from the year-ago actuals.
ALL beat the consensus estimate for earnings in three of the trailing four quarters and missed once, with the average surprise being 41.9%, as you can see below.
The Allstate Corporation Price and EPS Surprise
The Allstate Corporation price-eps-surprise | The Allstate Corporation Quote
Q2 Earnings Whispers
Our proven model predicts a likely earnings beat for Allstate this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. That is precisely the case here, as you will see below.
Earnings ESP: The company has an Earnings ESP of +36.50%. This is because the Most Accurate Estimate currently stands at 46 cents per share, higher than the Zacks Consensus Estimate of 33 cents.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Allstate currently carries a Zacks Rank #3.
Now, let’s see how things have shaped up before the second-quarter earnings announcement.
Q2 Factors to Note
Allstate’s revenues are likely to have benefited on the back of improved net premiums earned from most of its lines of business, attributable to rate increases. We expect net premiums earned to grow almost 10% year over year in the second quarter.
Net investment income is anticipated to have received an impetus from improved yields from the fixed-income portfolio. The Zacks Consensus Estimate for net investment income indicates almost 20% year-over-year growth, while our model estimate suggests a 17% increase.
The Zacks Consensus Estimate for adjusted net income from the Protection Services business indicates a nearly 2% increase from the year-ago period. We expect total costs and expenses to have decreased in the second quarter by more than 4% due to lower claims.
The Auto insurance business is expected to have been aided by expanding earned premiums and lower expenses in the second quarter. The Zacks Consensus Estimate for Auto premiums earned indicates 12% growth from a year ago. Also, the combined ratio in this line of business is pegged at 99.72%, improving from 108.3% in the year-ago quarter. This means more portion of premiums remained in the company’s kitty following claim payments.
The factors stated above are likely to have positioned the company for not only year-over-year growth but also an earnings beat. However, the company earlier stated that its total catastrophe losses were $2.12 billion (pre-tax) in the second quarter due to several geographically widespread events.
Price Performance
Allstate's stock has gained 20.9% in the year-to-date period compared with the industry’s growth of 21.1%. Nevertheless, the stock outperformed the S&P 500 Index, which grew 14.8% during the same period.
YTD Price Performance
Image Source: Zacks Investment Research
What Should Investors Do Now?
Given the potential for continued growth in the Protection Services business and improving yields from the fixed-income portfolio, investors who already own the stock may want to hold it for now. Its improving benefit ratios and decreasing costs are expected to boost second-quarter profits. However, due to its rising debt burden and a decline in policies in force, new investors may want to monitor the upcoming earnings results closely and wait for a more favorable entry point.
Stocks to Consider
Here are some other companies from the broader Finance space, which, according to our model, also have the right combination of elements to beat on earnings this time around:
Palomar Holdings, Inc. (PLMR - Free Report) has an Earnings ESP of +1.34% and a Zacks Rank of 3. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Palomar’s bottom line for the to-be-reported quarter is pegged at $1.12 per share, which increased by a penny over the past week. The estimate signals 30.2% year-over-year growth. The consensus estimate for PLMR’s revenues is pegged at $120.4 million, indicating a 34.9% increase from a year ago.
Oscar Health, Inc. (OSCR - Free Report) has an Earnings ESP of +3.23% and is a Zacks #3 Ranked player.
The Zacks Consensus Estimate for Oscar Health’s bottom line for the to-be-reported quarter is pegged at 16 cents per share, which signals a massive improvement from the year-ago loss of 7 cents. The consensus estimate for OSCR’s revenues is pegged at $2.2 billion, a 43.4% jump from a year ago. It beat earnings estimates in each of the past four quarters, with an average surprise of 62.3%.
Fidelity National Financial, Inc. (FNF - Free Report) has an Earnings ESP of +1.61% and a Zacks Rank of 3.
The Zacks Consensus Estimate for Fidelity National's bottom line for the to-be-reported quarter is pegged at $1.27 per share, suggesting a 25.7% year-over-year increase. The estimate remained stable over the past week. The consensus estimate for FNF’s revenues is pegged at $3.1 billion, predicting a 1.5% increase from the year-ago period.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.