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The Allstate Corporation (ALL) Intrinsic Value

DCF-based fair value calculation with Bear, Base, and Bull scenarios

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The Allstate Corporation (ALL)

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Intrinsic Value (DCF)

Current$195.47
→
Intrinsic$329.67
+69%
$212.40$329.67$563.11
Market implies 1% growth for 5 years
DCF analysis suggests ALL could have 69% upside at 9% growth — verify assumptions match your view.
At $195, the market prices in only 1% growth — below historical 9%, suggesting low expectations.
Range: Bear $212 → Bull $563. Current price implies expectations below the bear case — very conservative expectations.
Discount ↓Growth →5%7%9%11%
8%$410$450$493$539
10%$274$301$330$360
12%$203$222$243$266
14%$158$174$190$208

Bull Case

  • Bull case ($563) offers 188% upside at 11% growth, 8% discount
  • Price below even worst-case scenario — strong margin of safety
  • Market-implied growth (1%) ≤ historical CAGR (9%)

Bear Case

  • Bear case ($212) with 7% growth, 12% discount rate
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5-Year Net Income Projection

Year 1$5.09B
Year 2$5.55B
Year 3$6.06B
Year 4$6.61B
Year 5$7.21B
Terminal$114.28B

📐 Model Inputs

Growth Rate9.1%5Y CAGR (cascade: 5Y→3Y→TTM)
Discount Rate9.5%WACC estimate
Terminal Growth3.0%Perpetuity rate
Base Net Income$4.67BTTM actual
Bear g×0.8, r+2%
Base Historical CAGR
Bull g×1.2, r−1.5%
ℹ️

DCF estimates based on historical growth rates extrapolated forward. Uses Net Income (FCF not meaningful for insurers). See FAQ below for full methodology.

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Frequently Asked Questions

Is ALL stock undervalued or overvalued?
🟢 UNDERVALUED

ALL trades at $195.47 vs. our DCF-derived intrinsic value of $329.67, implying +59% upside. At a 9.5% WACC and 9.1% projected FCF growth, the market appears to be underpricing the present value of ALL's future cash flows. The bear case ($224.24) still suggests upside, providing margin of safety.

What is ALL's intrinsic value?

Using a 5-year DCF model: Base FCF of $4.67B, projected at 9.1% 5Y CAGR (best of revenue, EPS, or FCF growth), discounted at 9.5% WACC, with 3.0% terminal growth. Terminal value calculated via Gordon Growth Model: TV = FCF₅ × (1+g) / (WACC−g). After deducting $7.38B net debt and dividing by 0.27B shares: Bear $224.24 | Base $329.67 | Bull $476.96. Current price $195.47 implies +59% to base case.

How is ALL's fair value calculated?

DCF Methodology:

① Project FCF years 1-5 using 9.1% growth derived from 5-year historical CAGR (best of revenue, EPS, or FCF growth, with 8% floor and 25% cap).

② Calculate terminal value at year 5 using perpetuity growth model with g=3.0%.

③ Discount all cash flows to PV using WACC=9.5%.

④ Sum PV of explicit period + PV of terminal value = Enterprise Value ($95.67B).

⑤ Subtract net debt, divide by shares outstanding.

Sensitivity analysis available above—adjust WACC ±2% or growth ±3% to stress-test the valuation. Implied EV/FCF multiple: 20.5x.