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Allstate (ALL) Up 6.2% Since Last Earnings Report: Can It Continue?
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A month has gone by since the last earnings report for Allstate (ALL - Free Report) . Shares have added about 6.2% 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 its most recent earnings report in order to get a better handle on the important drivers.
Allstate Q2 Earnings Beat on Property-Liability Rate Hikes
Allstate reported strong second-quarter results, which benefited on the back of prudent rate increases, rise in Market-based investment income and insurance premiums. Also, improved Property-Liability underwriting results, thanks to its profit improvement plan, lower catastrophe losses and total expenses, aided the bottom line.
The second-quarter 2024 adjusted net income of $1.61 per share surpassed the Zacks Consensus Estimate of 33 cents. The company reported a loss of $4.42 per share in the year-ago quarter.
Operating revenues of $15.8 billion rose 12% year over year in the quarter under review. The top line beat the consensus mark by 1.7%.
Key Takeaways
Net investment income improved 16.7% year over year to $712 million in the second quarter thanks to increased market-based income, partly offset by reduced performance-based income. However, it missed the Zacks Consensus Estimate of $731.5 million and our model estimate of $713.6 million. Market-based investment income increased 24.4% year over year thanks to increased yields in fixed-income portfolios. However, performance-based investment income was affected by lower real estate investment results.
Total costs and expenses of $15.3 billion decreased 2.8% year over year but were higher than our estimate of $15 billion. The year-over-year decline was due to lower property and casualty insurance claims and claims expenses.
Allstate generated a pretax income of $430 million in the quarter under review against the year-ago quarter’s pretax loss of $1.7 billion.
Total policies in force were 199.9 million as of Jun 30, 2024, up 6.3% year over year. Catastrophe losses dropped 21.4% year over year in the second quarter to $2.1 billion.
Segmental Performances
The Property-Liability segment recorded premiums earned of $13.3 billion, which advanced 11.9% year over year on the back of increased average premiums resulting from rate hikes. The metric beat our model estimate of $13.1 billion. Premiums earned from Allstate brand and National General jumped 8.9% and 27.3%, respectively, from the year-ago period.
Underwriting loss in the Property-Liability unit amounted to $145 million in the second quarter, improving from the prior-year quarter’s loss of $2.1 billion. The metric was aided by a rise in earned premiums, reduced catastrophe losses and favorable underlying loss experience. The combined ratio of 101.1% improved 1,650 basis points year over year in the quarter under review and met our estimate.
The Protection Services segment’s revenues grew 12.7% year over year to $773 million in the second quarter, thanks to strength in Allstate Protection Plans and Arity. Also, the figure beat the consensus mark by 4.8%. Adjusted net income of $55 million improved 34.1% year over year and beat our model estimate of $52.9 million on the back of Allstate Protection Plans.
The Allstate Health and Benefits segment reported premium and contract charges of $474 million, which improved 4.6% year over year in the quarter under review and beat the Zacks Consensus Estimate and our model estimate by more than 2%. The unit’s performance was driven by sound individual health and group health results. Adjusted net income grew 1.8% year over year to $58 million, which beat the consensus mark by 8.6%.
Financial Update (as of Jun 30, 2024)
Allstate exited the second quarter with a cash balance of $599 million, which decreased from $722 million at 2023-end. Total assets of $108.4 billion increased from $103.4 billion at 2023-end.
Debt amounted to $8.1 billion, which increased from $7.9 billion at 2023-end.
Total shareholders’ equity of $18.6 billion increased from $17.8 billion at 2023-end.
Book value per common share was $62.14 as of Jun 30, 2024, which grew from $58.65 at 2023-end.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in estimates review.
VGM Scores
At this time, Allstate has a great Growth Score of A, though it is lagging a bit on the Momentum Score front with a B. Following the exact same course, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Allstate has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Allstate belongs to the Zacks Insurance - Property and Casualty industry. Another stock from the same industry, Axis Capital (AXS - Free Report) , has gained 6.7% over the past month. More than a month has passed since the company reported results for the quarter ended June 2024.
Axis Capital reported revenues of $1.5 billion in the last reported quarter, representing a year-over-year change of +6.8%. EPS of $2.93 for the same period compares with $2.23 a year ago.
For the current quarter, Axis Capital is expected to post earnings of $2.31 per share, indicating a change of -1.3% from the year-ago quarter. The Zacks Consensus Estimate has changed +1.2% over the last 30 days.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #1 (Strong Buy) for Axis Capital. Also, the stock has a VGM Score of B.
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Allstate (ALL) Up 6.2% Since Last Earnings Report: Can It Continue?
A month has gone by since the last earnings report for Allstate (ALL - Free Report) . Shares have added about 6.2% 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 its most recent earnings report in order to get a better handle on the important drivers.
Allstate Q2 Earnings Beat on Property-Liability Rate Hikes
Allstate reported strong second-quarter results, which benefited on the back of prudent rate increases, rise in Market-based investment income and insurance premiums. Also, improved Property-Liability underwriting results, thanks to its profit improvement plan, lower catastrophe losses and total expenses, aided the bottom line.
The second-quarter 2024 adjusted net income of $1.61 per share surpassed the Zacks Consensus Estimate of 33 cents. The company reported a loss of $4.42 per share in the year-ago quarter.
Operating revenues of $15.8 billion rose 12% year over year in the quarter under review. The top line beat the consensus mark by 1.7%.
Key Takeaways
Net investment income improved 16.7% year over year to $712 million in the second quarter thanks to increased market-based income, partly offset by reduced performance-based income. However, it missed the Zacks Consensus Estimate of $731.5 million and our model estimate of $713.6 million. Market-based investment income increased 24.4% year over year thanks to increased yields in fixed-income portfolios. However, performance-based investment income was affected by lower real estate investment results.
Total costs and expenses of $15.3 billion decreased 2.8% year over year but were higher than our estimate of $15 billion. The year-over-year decline was due to lower property and casualty insurance claims and claims expenses.
Allstate generated a pretax income of $430 million in the quarter under review against the year-ago quarter’s pretax loss of $1.7 billion.
Total policies in force were 199.9 million as of Jun 30, 2024, up 6.3% year over year. Catastrophe losses dropped 21.4% year over year in the second quarter to $2.1 billion.
Segmental Performances
The Property-Liability segment recorded premiums earned of $13.3 billion, which advanced 11.9% year over year on the back of increased average premiums resulting from rate hikes. The metric beat our model estimate of $13.1 billion. Premiums earned from Allstate brand and National General jumped 8.9% and 27.3%, respectively, from the year-ago period.
Underwriting loss in the Property-Liability unit amounted to $145 million in the second quarter, improving from the prior-year quarter’s loss of $2.1 billion. The metric was aided by a rise in earned premiums, reduced catastrophe losses and favorable underlying loss experience. The combined ratio of 101.1% improved 1,650 basis points year over year in the quarter under review and met our estimate.
The Protection Services segment’s revenues grew 12.7% year over year to $773 million in the second quarter, thanks to strength in Allstate Protection Plans and Arity. Also, the figure beat the consensus mark by 4.8%. Adjusted net income of $55 million improved 34.1% year over year and beat our model estimate of $52.9 million on the back of Allstate Protection Plans.
The Allstate Health and Benefits segment reported premium and contract charges of $474 million, which improved 4.6% year over year in the quarter under review and beat the Zacks Consensus Estimate and our model estimate by more than 2%. The unit’s performance was driven by sound individual health and group health results. Adjusted net income grew 1.8% year over year to $58 million, which beat the consensus mark by 8.6%.
Financial Update (as of Jun 30, 2024)
Allstate exited the second quarter with a cash balance of $599 million, which decreased from $722 million at 2023-end. Total assets of $108.4 billion increased from $103.4 billion at 2023-end.
Debt amounted to $8.1 billion, which increased from $7.9 billion at 2023-end.
Total shareholders’ equity of $18.6 billion increased from $17.8 billion at 2023-end.
Book value per common share was $62.14 as of Jun 30, 2024, which grew from $58.65 at 2023-end.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in estimates review.
VGM Scores
At this time, Allstate has a great Growth Score of A, though it is lagging a bit on the Momentum Score front with a B. Following the exact same course, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Allstate has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Allstate belongs to the Zacks Insurance - Property and Casualty industry. Another stock from the same industry, Axis Capital (AXS - Free Report) , has gained 6.7% over the past month. More than a month has passed since the company reported results for the quarter ended June 2024.
Axis Capital reported revenues of $1.5 billion in the last reported quarter, representing a year-over-year change of +6.8%. EPS of $2.93 for the same period compares with $2.23 a year ago.
For the current quarter, Axis Capital is expected to post earnings of $2.31 per share, indicating a change of -1.3% from the year-ago quarter. The Zacks Consensus Estimate has changed +1.2% over the last 30 days.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #1 (Strong Buy) for Axis Capital. Also, the stock has a VGM Score of B.