QS Research · Michael Burry's Scion Capital analyst template · 2006
ALLSTATE CORP (ALL)
As of 2026-11-11 · 12/15 boxes filled from SEC filings and market data
Report price $261.12 (close 2026-11-10)
Conclusion: WATCH
Conviction medium · base case +107% · downside -40% · upside +107%
Allstate at $261.12 is 5.6x TTM net income to common of $11.52B (TTM to Sep 30 2026), 2.13x common equity of $30.31B and 0.92x TTM sales, against a 38.0% TTM return on common equity - the lowest P/E of any profitable large-cap peer in the comps table (TRV 9.9x, CINF 10.9x, PGR 11.6x, CB 12.6x). The discount is not unexplained: TTM earnings carry $1.43B after-tax of FY2025 favorable prior-year reserve reestimates (14.1% of FY2025 net income, 22.6% of FY2025 underwriting income) plus an $838M pre-tax Q1 2026 auto release, while the Q3 2026 auto underlying combined ratio rose to 89.8 from 86.0 and the industry is moving from rate increases into competitive growth. At the independent 11.6x peer-median anchor on the same $11.52B, base value is $133.6B ($540.89, +107%); a downside that gives back 30% of TTM earnings ($8.06B, a deeper cut than the -22% implied by the $36.21 FY2026 consensus) at a compressed 4.8x (5.6x less 15%) is $38.4B, or -40.6%. So the arithmetic is 2.6:1 in my favour, but the earnings base is a post-reserve-release peak rather than a proven one, and the -25% downside discipline a long requires is not met. Watch: the mispricing and the 5.05% net buyback yield are real, the durability of $11.52B of earnings is not yet demonstrated.
Key numbers
- Share price: $261.12
- Market cap: $64.61B
- Latest financial period: TTM to Sep 30, 2026
- Revenue (TTM): $70.23B
- P/E (TTM): 5.6x
- Price / book: 2.13x
- Earnings-quality flags (TTM): none flagged
- Revenue growth (latest fiscal year): +5.6%
The 15 boxes
- ✓ 1. Long-form business notes
Allstate makes money mainly by underwriting personal P&C insurance through the Allstate Protection segment (auto, homeowners, other personal lines, shrinking commercial lines) plus commissions from other business lines and Answer Financial, with a second, much smaller engine in Protection Services (protection plans, roadside, dealer services, identity protection, Arity). FY2025 underwriting income was $8.69 billion on $57.68 billion of premiums earned and a 84.9 combined ratio, versus $3.15 billion and 94.1 in FY2024 — but $1.96 billion pre-tax of that came from favorable prior-year reserve releases, 22.6% of underwriting income. Since FY2020 the company has exited life/annuities (ALIC sale announced January 2021), folded National General into the independent-agency channel, and narrowed coastal property appetite in California and Florida. Scale has grown from $41.91 billion of FY2020 revenue to $67.69 billion in FY2025 and $70.23 billion TTM to September 30, 2026, with net income to common of $11.52 billion TTM.
- ✓ 2. Competitive advantage
Allstate's filings describe highly competitive property-liability markets where it competes on brand, financial strength, price, customer experience and distribution; the sources show price, agent and nontraditional-entrant competition but no cost or network moat. The earnings record is volatile: net income to common was negative in FY2022 and FY2023, then $10.16B in FY2025 and $11.52B TTM to Sep 2026, while total equity rebuilt to $32.31B. The 2025 risk-factor diff adds technology-deployment and rate-approval risk. The advantage looks limited to brand, financial strength and scale, not proven by stable returns.
- ✓ 3. 10-Q takeaways
Q3 2026 total revenues were $17.348B, up 0.5% from Q3 2025, with Property-Liability earned premiums of $15.086B (+3.8%) and total policies in force of 217.610M (+3.9%). Net income applicable to common shareholders was $2.050B ($8.03 diluted) versus $3.717B ($13.95) in Q3 2025, while adjusted net income was $2.493B ($9.76) versus $2.976B ($11.17). The Property-Liability recorded combined ratio rose to 86.6 from 80.1 as catastrophe losses rose to $1.650B from $558M, while Protection Services revenue grew 6.9%. The 10-Q reports no material risk-factor changes from the 2025 10-K.
- ✓ 4. Corporate governance
Filled; members read this box.
- ✓ 5. Overview of the prior 3 years of 8-K filings
Filled; members read this box.
- ✓ 6. Other significant filings
Filled; members read this box.
- ✓ 7. Chronology of significant news and events
Filled; members read this box.
- ✓ 8. Comparables valuation interpretation
Filled; members read this box.
- ✓ 9. Insider trading interpretation
Filled; members read this box.
- ○ 10. Earnings-call notes
- ○ 11. Impression of the shareholder letter
- ○ 12. Scuttlebutt overview
- ✓ 13. Valuation and risk/reward summary
Filled; members read this box.
- ✓ 14. Current price suppression and potential catalysts
Filled; members read this box.
- ✓ 15. Conclusions
The call above.
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