Allstate Q4 loss pre-announcement due to weak auto business, says MKM Partners

MKM Partners analyst Harry Fong keeps his Buy rating and $145 price target on Allstate after the company announced that it expects a Q4 net loss of $335M-$385M yesterday. Continued weak performance in personal auto and, to a lesser degree, investment income from its limited partnerships were the "key problems" for the quarter, the analyst tells investors in a research note, also noting that he expected higher catastrophe losses after December storms, but these were "only marginally higher". Fong adds that 2022 has been very difficult for the company, but he remains encouraged by all the rate actions taken, especially last quarter’s increase in California – its biggest state.