NEW YORK (TheStreet) -- Allstate (ALL - Get Report) shares are climbing, up 0.54% to $72.43 in trading on Wednesday after the home and auto insurer agreed to settle a $100 million fraud lawsuit against Morgan Stanley (MS) .
The company sued the bank and other lenders in 2011 alleging that they knowingly sold financial packages that were risky while claiming that they were fundamentally sound. The toxic home loan securities were an integral part of the 2009 recession.
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Terms of the settlement were not released and Morgan Stanley declined to comment on the resolution though "The lawsuit has been settled on mutually agreeable terms," Allstate spokeswoman Maryellen Thielen told Bloomberg.
Separately, the company is scheduled to release its fourth quarter earnings results after the closing bell today. Analysts on average are expecting the company to reported quarterly earnings of $1.67 per diluted share.
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 solid stock price performance, impressive record of earnings per share growth, compelling growth in net income, revenue growth and largely solid financial position with reasonable debt levels by most measures. We feel these strengths outweigh the fact that the company shows weak operating cash flow."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- Powered by its strong earnings growth of 163.63% and other important driving factors, this stock has surged by 37.32% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, although almost any stock can fall in a broad market decline, ALL should continue to move higher despite the fact that it has already enjoyed a very nice gain 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 ($5.34 versus $4.81).
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Insurance industry. The net income increased by 147.2% when compared to the same quarter one year prior, rising from $316.00 million to $781.00 million.
- ALL's revenue growth trails the industry average of 21.7%. Since the same quarter one year prior, revenues slightly increased by 4.7%. Growth in the company's revenue appears to have helped boost the earnings per share.
- ALL's debt-to-equity ratio is very low at 0.23 and is currently below that of the industry average, implying that there has been very successful management of debt levels.
- You can view the full analysis from the report here: ALL Ratings Report