Allstate (ALL) posted $2.01 first quarter operating EPS, and raised its 2006 EPS view to $6.00-$6.40. Wachovia upgraded its raing on the shares to outperform from market perform.
Analyst Lara Devieux says she upgraded the shares because as of the Apr. 18 close, Allstate was down 11% since Hurricane Katrina, vs. a 9% rise in the S&P 500 index. With the stock trading at 1.6 times book value, vs. 1.7 times the personal lines peer group average, Devieux thinks expectations for slowing premium growth and margin deterioration resulting from the company's catastrophe management actions been priced into the stoock. She feels the company is in a much better position going into a potentially active 2006 hurricane season, having cut its exposure to catastrophe. She increased her $5.95 2006 EPS estimate to $6.40 and her $6.00 2007 forecast to $6.65.