Will This Downgrade Hurt Allstate (ALL) Today?

Update (9:35 a.m.): Updated with Thursday market open information.

NEW YORK (TheStreet) -- Credit Suisse reduced its target price on Allstate  (ALL) to $62, reduced its estimates through 2015 and set an "outperform" rating. The firm noted the company is seeing higher catastrophe losses and lower cost-cutting.

The stock was rising 2.61% to $53.14 shortly after the market opened on Thursday.

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Separately, TheStreet Ratings team rates ALLSTATE CORP as a "buy" with a ratings score of A-. TheStreet Ratings Team has this to say about their recommendation:

"We rate ALLSTATE CORP (ALL) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, attractive valuation levels, good cash flow from operations and growth in earnings per share. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The revenue growth came in higher than the industry average of 21.5%. Since the same quarter one year prior, revenues slightly increased by 2.1%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • Although ALL's debt-to-equity ratio of 0.29 is very low, it is currently higher than that of the industry average.
  • ALLSTATE CORP reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, ALLSTATE CORP increased its bottom line by earning $4.81 versus $4.68 in the prior year. This year, the market expects an improvement in earnings ($5.13 versus $4.81).
  • Net operating cash flow has significantly increased by 171.55% to $1,184.00 million when compared to the same quarter last year. In addition, ALLSTATE CORP has also vastly surpassed the industry average cash flow growth rate of -86.73%.
  • You can view the full analysis from the report here: ALL Ratings Report

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