Allstate Stock: Strong Earnings and Growth Keep the Outlook Bright

Property and casualty insurer The Allstate Corporation ALL appears well positioned for growth, supported by improving underwriting profitability, rising investment income, solid policy growth and increased capital returns.

Its shares have gained 23.6% year to date, comfortably outperforming the industry’s 2.4% increase and the S&P 500’s 11.7% rise, signaling investor confidence.

Price Performance - ALL, Industry & S&P 500

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The rising frequency and severity of natural catastrophes are increasing claims costs but also creating growth opportunities for the property and casualty insurance industry. Greater exposure to weather-related risks is raising awareness among households and businesses, supporting demand for broader and more tailored insurance coverage. For Allstate, this environment can drive premium growth, improve pricing adequacy and encourage product innovation as the company adjusts coverage and rates to better reflect evolving risk.

Allstate is growing without sacrificing margins. Policies in force reached roughly 216 million in the second quarter. Auto and homeowners policies continued to increase, while issued applications rose 9.9%. It is steadily scaling its Protection Services business, creating a complementary growth engine beyond traditional insurance.

Auto’s first-half underlying combined ratio was 88.5, down from the year-ago level of 89.5, substantially better than the roughly mid-90s level Allstate has historically viewed. Management will likely trade some margin for profitable growth where appropriate.

Investment income has become another meaningful earnings engine. Net investment income increased 9.8% in the first quarter and then 33.8% in the second quarter to $1 billion, benefiting from a larger portfolio, higher fixed-income yields and stronger performance-based investment returns.

Allstate had about $9.5 billion of deployable holding-company capital following the second quarter and repurchased $1 billion of stock during the quarter, along with paying $280 million in dividends. Over the past decade, ALL repurchased 39% of its outstanding shares. It still has $2.6 billion left under its buyback authorization.

Allstate’s Earnings Estimates & Surprise History

The Zacks Consensus Estimate for 2026 adjusted earnings for Allstate is currently pegged at $34.45 per share, which has witnessed 12 upward revisions against no downward movement over the past month. During this time, the consensus mark for 2027 earnings improved 4%. The consensus estimate for 2026 and 2027 revenues suggests 4.4% and 4% year-over-year increases, respectively.

It beat earnings estimates in each of the past four quarters, with an average surprise of 45.3%.

The Allstate Corporation Price, Consensus and EPS Surprise

The Allstate Corporation price-consensus-eps-surprise-chart | The Allstate Corporation Quote

ALL is trading comparatively cheap at the moment from a valuation standpoint. Its forward earnings multiple of 8.73X is lower than its five-year median of 10.90X and the industry average of 26.85X. Allstate now has a Value Score of A.

Zacks Rank & Other Key Picks

Allstate currently sports a Zacks Rank #1 (Strong Buy). Some other top-ranked stocks in the broader insurance space are Horace Mann Educators Corporation HMN, CNO Financial Group, Inc. CNO and Assurant, Inc. AIZ. While Horace Mann Educators also has a Zacks Rank #1, CNO Financial and Assurant are carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Horace Mann Educators’ current-year earnings is pegged at $4.78 per share, which has witnessed two upward revisions over the past 30 days and no movement in the opposite direction. Furthermore, the consensus estimate for HMN’s 2026 revenues indicates a 3.9% year-over-year increase.

The consensus mark for CNO Financial’s current-year earnings is pegged at $4.74 per share, which indicates 16.2% year-over-year growth. It has witnessed two upward estimate revisions against none in the opposite direction in the past 30 days. CNO beat earnings estimates in each of the last four quarters, with an average surprise of 23.2%.

The Zacks Consensus Estimate for Assurant’s current year earnings is pegged at $22.05 per share, which indicates 11.5% year-over-year growth. It has witnessed five upward estimate revisions against none in the opposite direction in the past month. AIZ beat earnings estimates in each of the last four quarters, with an average surprise of 17.7%.

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This article originally published on Zacks Investment Research (zacks.com).

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