Market Overview

Buckingham Upgrades Allstate But Remains Cautious

Share:
Buckingham Upgrades Allstate But Remains Cautious
Related ALL
Jim Cramer Weighs In On Biogen, Colgate-Palmolive And More
12 Stocks To Watch For November 1, 2018
Allstate estimates October catastrophe loss at $202M (Seeking Alpha)

It’s been a tough year so far for Allstate Corp (NYSE: ALL), but one Wall Street analyst said Wednesday that investors are now in good hands.

The Analyst

Buckingham Research Group's Amit Kumar upgraded Allstate from Underperform to Neutral and reiterated an $88 price target. Kumar also reiterated an Underperform rating and $52 target for Progressive Corp (NYSE: PGR).

The Thesis

The year-to-date 9.6-percent decline in Allstate stock has brought its valuation down to a reasonable level headed into second-quarter earnings, Kumar said in a Wednesday note. (See the analyst's track record here.) 

Buckingham raised its Q2 EPS estimate from $1.45 to $1.60 and 2018, 2019 and 2020 estimates from $8.40, $8.45 and $8.55 to $8.75, $8.60 and $8.85.

Despite an improved valuation, Kumar said Allstate still faces some market headwinds.

“We continue to remain cautious on personal auto trends, as supported by our discussion surrounding loss costs and rate filing data which points to tightening of margin going forward,” the analyst said. 

That negative outlook is a major reason why Kumar remains bearish on Progressive. There's no clear reason why Progressive shares are up 5 percent year-to-date while Allstate stock is down significantly, he said.

Progressive stock has a forward PE of around 13, while Allstate’s is near 10 — roughly in-line with its long-term historical average, according to Buckingham. 

Price Action

Allstate shares were up 1.45 percent at $95.63 at the time of publication Wednesday, while Progressive was higher by 1.09 percent at $60.05. 

Related Links:

B. Riley FBR Maintains Neutral on Allstate, Raises Price Target to $88

Generators To Insurers: Trading Tropical Storms

Photo courtesy of Allstate. 

Latest Ratings for ALL

DateFirmActionFromTo
Nov 2018Morgan StanleyMaintainsEqual-WeightEqual-Weight
Nov 2018CitigroupMaintainsBuyBuy
Oct 2018CitigroupMaintainsBuyBuy

View More Analyst Ratings for ALL
View the Latest Analyst Ratings

Posted-In: Amit Kumar Buckingham Research GroupAnalyst Color Upgrades Price Target Reiteration Analyst Ratings Best of Benzinga

 

Related Articles (ALL + PGR)

View Comments and Join the Discussion!

Latest Ratings

StockFirmActionPT
LXFTKeyBancDowngrades0.0
CPAImperial CapitalDowngrades68.0
PRMWImperial CapitalInitiates Coverage On18.0
TGTKeyBancInitiates Coverage On110.0
QCOMMorgan StanleyUpgrades0.0
View the Latest Analytics Ratings
Don't Miss Out!
Join Our Newsletter
Subscribe to:
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Daily Analyst Rating
A summary of each day’s top rating changes from sell-side analysts on the street.
Fintech Focus
Your weekly roundup of hot topics in the exciting world of fintech.
Thank You
for registering for Benzinga’s newsletters and alerts.
• The Daily Analysts Ratings email will be received daily between 7am and 10am.
• The Market in 5 Minutes email will be received daily between 7am and 8am.
• The Fintech Focus email will be received every Friday between 2pm and 5pm.

Autoliv Downgraded By Wells Fargo After Veoneer Spinoff

Mid-Day Market Update: Healthcare Services Falls After Q2 Miss; CounterPath Shares Climb