Allstate (ALL) Stock Forecast & Price Target

Allstate has demonstrated strong business growth, reflected in a 26% year-over-year increase in new issued applications, bolstered by a significant rise in advertising expenditures. The company's net investment income rose by 3.3% to $708 million, surpassing prior estimates and indicating financial stability and effective asset management. Furthermore, Allstate's homeowners segment showed promising potential with a 2.5% yearly increase in policies in force, underpinned by superior underwriting performance compared to industry averages, which enhances confidence in future earnings growth.

The financial outlook for Allstate appears negative due to a significant decline in the company's personal auto insurance retention rates, which fell by 20 basis points year-over-year to 84.7% in 3Q24, contributing to a year-over-year policy in force (PIF) decline of 1.5%. Additionally, this trend of decreasing renewal retention—down 2.7 percentage points over the past ten quarters amidst cumulative rate increases of 36%—suggests that customer loyalty is waning, further exacerbating the company's challenges. Compounded by ongoing losses in its "other" and commercial lines segments, Allstate is anticipated to face pressure on earnings per share, with expectations of a loss of approximately $0.85 per share in its commercial lines business in 2024.