Why Allstate (ALL) is a Top Growth Stock for the Long-Term

Zacks outlines its proprietary stock-rating methodology, combining the Zacks Rank with complementary Style Scores (Value, Growth, Momentum, and VGM), noting that Zacks Rank #1 stocks have historically averaged 23.75% annual returns. Using this framework, Allstate (ALL) is identified as a significant growth prospect, despite its Zacks #3 (Hold) rank, due to its strong A VGM and B Growth Style Scores. Allstate is projected to achieve 14.3% earnings growth this fiscal year, supported by recent analyst estimate upgrades for FY25 and a notable 57.7% average earnings surprise, positioning it as a compelling consideration for growth investors.

Analysis

The Allstate Corporation (ALL) presents a compelling growth narrative despite its neutral Zacks #3 (Hold) rating, primarily driven by strong underlying fundamental metrics. The company scores an 'A' for its overall VGM (Value, Growth, Momentum) rating and a 'B' for its Growth Style Score, indicating strength beyond its primary rank. This is substantiated by a forecast for 14.3% year-over-year earnings growth in the current fiscal year. Analyst sentiment is notably positive and improving for the medium term, with ten analysts revising their fiscal 2025 earnings estimates upward in the last 60 days. This has lifted the Zacks Consensus Estimate for FY25 by $2.73 to $20.93 per share. Furthermore, Allstate has a strong track record of outperforming expectations, evidenced by an average positive earnings surprise of 57.7%, suggesting that current forecasts may still have upside potential.

Key Decisions for Investors

• Investors should look beyond the neutral Zacks #3 'Hold' rating and weigh the strong forward-looking growth indicators, such as the 14.3% projected earnings growth and positive analyst revisions.
• The trend of upward earnings estimate revisions for fiscal 2025 is a key catalyst to monitor, as continued positive momentum could precede a formal ratings upgrade.
• Given its 'B' Growth Score and significant 57.7% average earnings surprise, Allstate warrants consideration for growth-oriented portfolios, as its potential may not be fully captured by the current 'Hold' designation.