How Will Allstate (ALL) Stock React To Its Earnings Report?

NEW YORK (TheStreet) -- Allstate (ALL) shares are flat in after-market trading on Tuesday following the release of the company's first quarter earnings results.

The insurance company posted a 17% first quarter net income drop to $587 million, or $1.30 per share, from $709 million, or $1.47 per share last year.

Consolidated revenues for the quarter were $8.6 billion, beating the $8.4 billion it posted last year.

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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 increase in stock price during the past year. 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 10.5%. 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.
  • Compared to where it was a year ago today, the stock is now trading at a higher level, reflecting both the market's overall trend during that period and the fact that the company's earnings growth has been robust. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
  • 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 ($5.10 versus $4.81).
  • You can view the full analysis from the report here: ALL Ratings Report
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