NEW YORK (Reuters) - Shares of Allstate (ALL.N) dropped sharply on Thursday after the largest publicly traded U.S. home and auto insurer missed third-quarter earnings estimates on a drop in customer retention.
The company also said it was not about to engage in a stock buyback, dashing hopes it could return cash to shareholders soon.
Allstate shares fell 6.1 percent to $30.51 in midday New York Stock Exchange trade, their lowest level in about six weeks. It was the stock’s biggest daily decline in percentage terms since late April 2009.
S&P insurance equity analyst Cathy Seifert said in a note that Allstate was being valued at a discount to peers, which she said was warranted given its “mediocre results.”
Others said some of the declines the company saw in the quarter were to be expected.
“I think it’s a little bit overblown. As they’re trying to improve their homeowners (profits) it’s natural to see a little bit of their auto ... declines there,” said Morningstar analyst Drew Woodbury.
Reporting by Ben Berkowitz, editing by Dave Zimmerman