Morgan Stanley has adjusted its outlook on Allstate (ALL, Financial), reducing the price target for the insurance provider's stock from $229 to $225. Despite this adjustment, the firm remains optimistic about Allstate's potential, maintaining an Overweight rating on the shares.
The adjustment primarily stems from revised estimates affecting the company's property and casualty insurance sector. Analysts have lowered projections for the first quarter and for 2025 earnings per share (EPS). This revision follows an expectation of a slightly higher core loss ratio for Personal Lines, potentially impacted by tariff implications.
Additionally, Morgan Stanley has tempered its growth forecasts for Commercial Lines, citing macroeconomic uncertainty which could hinder organic growth. On the other hand, cost reductions for brokers may partially offset these declines.
Furthermore, the analysis highlights heightened concern over increased catastrophic events and general economic uncertainty, which could affect the reinsurance sector negatively. The firm has broadly reduced price targets across its coverage as a response to deteriorating market sentiment and fears of a looming recession, with some cases reflecting downward revisions in EPS expectations.
