$165 price target and strong buy rating
- Shares of Allstate Corp (NYSE:ALL) received a price target of $165 from Raymond James. These are the details.
Shares of Allstate Corp (NYSE:ALL) received a price target of $165 from Raymond James. And Raymond James analyst Gregory Peters upgraded Allstate from an “Outperform” rating to a “Strong Buy” rating while raising the price target by $145.
Peters adjusted the rating after Allstate released its implemented auto pricing report in February and also hosted its first investor call on a special topic focused on auto profitability. And Allstate management said the company achieved an average rate increase of 9.7% at 11 Allstate auto brand locations and an average of 5.9% at 10 National General auto brand locations in February. .
“ALL has now achieved 41 rate increases of an average of 7.8% on 53% of its automatic premiums issued by the Allstate brand since the start of 4Q21. We believe ALL has the greatest opportunity for revaluation over the next 18 months,” Peters wrote in a research note. “We expect management’s aggressive approach to raising rates and improving automotive profitability to be a catalyst for the relatively undervalued stock. We also believe strategic decisions have been ignored, although there are potential longer-term positive consequences for the company’s competitive position and ROE profile.We believe that the ongoing multi-year transformative growth strategy, including the reduction expenses, will improve the competitive position, while the divestment of the life business last year will lead to a higher long-term ROE profile.
Peters expects a positive shift in shareholder sentiment for Allstate’s management team toward the higher levels achieved in 2020 when the company dominates the overall auto insurance market with the Allstate Shelter-in concept. -Place Payback – which brought in a $1 billion bounty to customers.
The price target increase assumes Allstate can trade at approximately 13.4x 2023E operating EPS – which is still below the 18.4x average of its immediate automotive peers for FY23 .
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