Much of the damage from Hurricane Sandy is from flooding, and although Allstate will be adjusting flood claims, the claims will be paid by the federal government, through the National Flood Insurance Program. Deutsche Bank analyst Joshua Shanker on Wednesday wrote that "An Allstate loss of less than $500mm for Sandy may be seen as a triumph."

Shanker rates Allstate a "Buy" with a price target of $47, and estimates the company will earn $4.80 a share in 2013. The analyst said that "by our estimates core homeowners' margins have improved by almost 200bps and 700bps over sequential quarters and annually, respectively," and that "core auto margins improved modestly as well. We believe consensus number need to rise to reflect underlying improved margins."

KBW analyst Cliff Gallant has a "Market Perform" rating on Allstate, and on Wednesday cut his 2012 EPS estimate to $4.35 from $4.60 "due to Sandy," but raised his 2013 EPS estimate to $4.80 from $4.65, "on good underlying trends." Gallant also raised his price target for the shares by five dollars, to $42, "in-line with book." Allstate's book value per share increased to $42.64 as of Sept. 30, from $34.84 a year earlier.

Gallant said that for the third quarter, Allstate's "underwriting results were ahead of our expectations, with a lower-than-expected combined ratio (90.2% versus our 94.3% estimate) and better premium growth (5.0% versus our 3.5% estimate)," was "primarily due to the company's recent acquisition of Esurance, which added $282 million of new written premiums , and an increase in Homeowners premiums."

Allstate closed at $39.98 Wednesday, returning 49% year-to-date. The shares trade for nine times the consensus 2013 EPS estimate of $4.45.

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-- Written by Philip van Doorn in Jupiter, Fla.

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Philip W. van Doorn is a member of TheStreet's banking and finance team, commenting on industry and regulatory trends. He previously served as the senior analyst for TheStreet.com Ratings, responsible for assigning financial strength ratings to banks and savings and loan institutions. Mr. van Doorn previously served as a loan operations officer at Riverside National Bank in Fort Pierce, Fla., and as a credit analyst at the Federal Home Loan Bank of New York, where he monitored banks in New York, New Jersey and Puerto Rico. Mr. van Doorn has additional experience in the mutual fund and computer software industries. He holds a bachelor of science in business administration from Long Island University.

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