In a report published Wednesday, Deutsche Bank analyst Joshua Shanker reiterated a Buy rating on Allstate ALL, and raised the price target from $57.00 to $58.00.
In the report, Deutsche Bank noted, “Repurchasing, retirement and pre-refunding of debt has totaled $3.1B so far in 2013 (compared with issuance of $1.5B YTD) and takes long-term debt down to $4.5B from $6.1B. Interest costs should decline by $30mm per quarter, and we believe Allstate is meaningfully underlevered at an 18% long-term debt-to-capital ratio. The company is currently tapping the commercial paper market to augment funding needs and will look to issue debt depending on market conditions. We believe, as in 2013, Allstate could supplement share repurchase in excess of earnings with a buyback funded by debt issuance in 2014.”
Allstate closed on Tuesday at $46.88.
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