NEW YORK (TheStreet) -- Allstate (ALL) shares are down -1.5% to $57.08 on Tuesday after being downgraded to "market perform" from "outperform" by analysts at William Blair who made a valuation call on the insurance company.
Must Read: Warren Buffett's 25 Favorite Stocks
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 and increase in stock price during the past year. We feel these strengths outweigh the fact that the company has had sub par growth in net income."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- Despite its growing revenue, the company underperformed as compared with the industry average of 7.4%. Since the same quarter one year prior, revenues slightly increased by 2.5%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- Although ALL's debt-to-equity ratio of 0.28 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, regardless of the company's weak earnings results. 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's earnings per share declined by 11.6% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, ALLSTATE CORP increased its bottom line by earning $4.81 versus $4.68 in the prior year. For the next year, the market is expecting a contraction of 1.8% in earnings ($4.73 versus $4.81).
- You can view the full analysis from the report here: ALL Ratings Report