Allstate (ALL) has been moving lower with the overall market over the last week, but the company will benefit from higher interest rates. All insurance companies generate a lot of interest income from investing customer premiums in short-term fixed assets until they are needed to payout claims, so higher rates will benefit companies in the sector, including Allstate. Allstate is forecast to grow its earnings by 22.4% during the current year, and looking ahead analysts expect average annual earnings growth of 14.7% over the next five years. The strong growth rates, combined with a low P/E of 10.9 suggests that there is a lot of upside to the stock, and the recent sell off creates a good buying opportunity. ALL is now trading at $91.22, and analysts have a $103.58 average price target on the stock.
Chart courtesy of www.stockcharts.com