Allstate Corporation (NYSE: ALL) has announced estimated catastrophe losses for January 2024, totaling $276 million or $218 million after-tax. These losses were driven by two events that comprised approximately 80% of the total losses, partially offset by favorable reserve reestimates for prior events.
Jess Merten, Chief Financial Officer of Allstate Corporation, stated, "Allstate continues to pursue rate increases as we execute the auto insurance profit improvement plan and keep pace with loss cost trends." Merten added, "During the month of January, rate increases for Allstate brand auto insurance resulted in a premium impact of 1.4%, which are expected to raise annualized written premiums by approximately $363 million, and rate increases for Allstate brand homeowners insurance have resulted in a premium impact of 0.3%, which are expected to raise annualized written premiums by approximately $40 million."
Merten also highlighted that implemented rate increases and inflation in insured home replacement costs resulted in a 12.1% increase in homeowners insurance average gross written premium in January 2024 compared to the prior year.
The company's shares have moved -0.4%, and are now trading at a price of $160.72.
The company's full 8-K submission is available here.
| 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | |
|---|---|---|---|---|---|---|
| Revenue (M) | $39,815 | $41,541 | $41,909 | $50,588 | $51,412 | $55,909 |
| Interest Income (M) | $332 | $327 | $318 | $330 | $335 | $356 |
| Operating Margins | 7% | 15% | 13% | 10% | -3% | -4% |
| Net Margins | 5% | 12% | 13% | 3% | -3% | -4% |
| Net Income (M) | $2,160 | $4,847 | $5,576 | $1,599 | -$1,311 | -$1,976 |
| Depreciation & Amort. (M) | $511 | $647 | $686 | $1,086 | $847 | $740 |
| Diluted Shares (M) | 353 | 334 | 316 | 299 | 271 | 262 |
| Earnings Per Share | $5.7 | $14.03 | $17.31 | $4.96 | -$5.22 | -$7.93 |
| EPS Growth | n/a | 146.14% | 23.38% | -71.35% | -205.24% | -51.92% |
| Avg. Price | $84.09 | $91.08 | $91.98 | $115.99 | $123.91 | $161.39 |
| P/E Ratio | 14.55 | 6.39 | 5.25 | 23.01 | -23.74 | -20.35 |
| Free Cash Flow (M) | $4,898 | $4,696 | $5,183 | $4,771 | $4,701 | $3,709 |
| EV / EBITDA | 10.99 | 5.42 | -7.43 | -1.63 | 19.19 | 1.81 |
| Total Debt (M) | $6,451 | $6,631 | $7,825 | $7,976 | $7,964 | $7,946 |
Based on the current market conditions, the stock of Allstate Corporation is likely fairly valued at a price of $160.72 per share. This is due to its strong revenue growth, which is rapidly increasing at a rate of 6.6%.
Growth factors for Allstate include the rapid increase in revenues, while negatives include decreasing capital expenditures and declining earnings per share over the last 6 years. The operating margins are in line with the industry average at 6.41%.
Value factors for Allstate include its total liabilities far exceeding its current assets, resulting in a negative net current asset level. Additionally, the firm's free cash flows have been declining over the last 5 years, with a compounded average growth rate of -5.0%.
It is important to note that this investment thesis is not personalized financial advice and investors should conduct their own research before making any investment decisions.
