Low Cat Losses Could Signal Strong Q1 Results for Allstate (ALL) - MKM Partners
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Rating Summary:
16 Buy, 19 Hold, 4 Sell
Rating Trend:
Down
Today's Overall Ratings:
Up: 12 | Down: 21 | New: 20
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Allstate (NYSE: ALL) is expected to report its first quarter 2013 results on our around May 1 and according to analysts at MKM Partners they could be "very good" given the lack of catastrophe losses.
The firm noted that into the release, Allstate's investor relations department asks all of the sell-side analysts that cover its stock for the key figures used to derive their estimates. MKM's Harry Fong suspects this will prompt analysts to "review their models and be reminded that the company did not report catastrophe loss data for January or February, signaling that catastrophe losses for the first two months of the quarter came in at less than $300 million." Allstate would issue a press release if catastrophe losses exceeded $150 million for the month of March, Fong notes.
"However, notwithstanding the big snow storm we had in early February (40 inches in Hamden, CT), and several other winter storms including a patch of tornadoes in the Southeast in January, catastrophe losses in the first quarter, in general, seem to be low," he said.
MKM's estimate is $1.30 versus the consensus of $1.32. While their estimate is not overly aggressive or conservative, they suspect the consensus estimate may increase as we approach May.
The firm lifted their price target of $60.00 (from $55.00), saying the company continues to maintain strong profitability in its auto business and they believe the homeowners business will continue to exhibit profitability improvement for the next several years.
For an analyst ratings summary and ratings history on Allstate click here. For more ratings news on Allstate click here.
Shares of Allstate closed at $50.11 yesterday.
The firm noted that into the release, Allstate's investor relations department asks all of the sell-side analysts that cover its stock for the key figures used to derive their estimates. MKM's Harry Fong suspects this will prompt analysts to "review their models and be reminded that the company did not report catastrophe loss data for January or February, signaling that catastrophe losses for the first two months of the quarter came in at less than $300 million." Allstate would issue a press release if catastrophe losses exceeded $150 million for the month of March, Fong notes.
"However, notwithstanding the big snow storm we had in early February (40 inches in Hamden, CT), and several other winter storms including a patch of tornadoes in the Southeast in January, catastrophe losses in the first quarter, in general, seem to be low," he said.
MKM's estimate is $1.30 versus the consensus of $1.32. While their estimate is not overly aggressive or conservative, they suspect the consensus estimate may increase as we approach May.
The firm lifted their price target of $60.00 (from $55.00), saying the company continues to maintain strong profitability in its auto business and they believe the homeowners business will continue to exhibit profitability improvement for the next several years.
For an analyst ratings summary and ratings history on Allstate click here. For more ratings news on Allstate click here.
Shares of Allstate closed at $50.11 yesterday.
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