Morgan Stanley Downgrades Allstate to Equalweight on Maturing Thesis
Morgan Stanley downgraded Allstate (NYSE: ALL) to Equalweight from Overweight on Dec 18, 2025, and lowered its price target to **$215** USD. The firm cited a more competitive operating environment and a maturing investment thesis as primary drivers for the rating change.
The analyst noted that the previous investment case for the insurer-which focused on attractive valuation, improving growth, and margins exceeding consensus expectations-has largely played out. While steady earnings from the homeowners insurance business are expected to provide support through 2026, the firm adopted a neutral stance due to rising competition.
The revised price target of **$215** per share is based on the following financial projections:
- An estimated **8.9x** price-to-earnings multiple applied to projected 2027 earnings per share of **$24.07**.
- A softening auto underwriting cycle impacting valuation multiples.
- An estimated **1.6x** price-to-book valuation, excluding AOCI.
- A projected 2027 operating return on equity of **18.5%**.
Additional information regarding the company and its operations can be found in the ALL and ALL. Historical context and corporate objectives are detailed in the ALL and ALL reports.
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