Allstate Earnings: Finishing the Year on a Strong Note

Allstate endured a difficult 2023, but fourth-quarter results were largely positive, in our view. The company saw improvement in auto lines and benefited from a minimal level of catastrophes. A solid profit for the quarter allowed the company to close out the full year with a modest loss of $316 million. We will maintain our $122 fair value estimate and see the shares as materially overvalued. While Allstate is likely on an upswing, we don’t think the company has a moat, and we believe it is challenged when it comes to long-term growth. As such, we think the current market book multiple, which is materially higher than the company's historical average, is not fully warranted.