Keefe, Bruyette & Woods (KBW) has raised its price target on Allstate Corporation to $260.00 from $254.00 while keeping an Outperform rating, following the insurer's fourth-quarter earnings announcement.
In its update, KBW pointed to several operational trends it expects will underpin both earnings growth and a higher valuation multiple for the company. Those trends include accelerating growth in personal auto policies-in-force, favorable core loss ratios, reductions in expense ratios, and an assertive program of share repurchases. KBW noted that these elements are consistent with Allstate's reported 42% return on equity and 17.39% dividend growth over the last twelve months, as reported by InvestingPro data.
As part of the revision, KBW increased its operating earnings per share estimates for Allstate to $25.80 for 2026 and $26.00 for 2027, up from prior forecasts of $24.70 and $25.40, respectively. KBW's explanation for the updated projections cited expectations for a lower 2026 core loss ratio, further reductions in expense ratios, and larger share repurchases. Those positive adjustments were noted as partly offset by assumptions of slower premium growth, a higher catastrophe loss ratio, and reduced income from the Service segment.
KBW's new $260 price target corresponds to 10.0 times its estimated 2027 operating earnings per share for Allstate.
Allstate's reported fourth-quarter results provided the near-term backdrop for the analyst adjustments. The company posted adjusted earnings per share of $14.31 for the quarter, comfortably above the consensus analyst estimate of $9.60. Quarterly revenue totaled $17.3 billion, marginally ahead of the $17.24 billion estimate and representing a 5.1% increase from the same period a year earlier. The quarter also featured a doubling of net income compared with the prior-year period.
Separately, Raymond James reiterated its Strong Buy rating on Allstate and left its price target unchanged at $260.00. That firm's favorable stance was attributed to disciplined pricing actions, ongoing expense efficiency, and the company's Transformative Growth initiative. Allstate also announced a new $4.0 billion share repurchase program, which KBW and Raymond James view as supportive of shareholder returns and the earnings profile.
Analysts highlighted that these developments occur within an environment of a softening property and casualty insurance rate cycle, yet the firms emphasized Allstate's durable earnings profile and capital actions as supportive factors.
This article summarizes analyst revisions and the company-reported quarter without offering investment advice. Readers should consider the described metrics and analyst assumptions in the context of their own investment objectives and risk tolerance.