UPDATE: Sterne Agee Color On ALL Initiation

Sterne Agee, which initiated coverage of The Allstate Corporation ALL, is providing some color on the stock. “We believe earnings have the potential to benefit from several factors,” Sterne Agee writes, “including: 1) “Improvement in auto combined ratio (addressing PIP loss issues in NY and FL). 2) “Improvement in homeowners results (mid to high single digit rate increases). 3) “Stabilization and return to moderate top line growth. 4) “Continued capital management given strong balance sheet. 5) “Longer-term stabilization and improvement in NII. 6) “Strategic initiatives in Allstate Financial. “In our view, ALL is one of the few companies in the P&C sector that has the potential to drive meaningful earnings and ROE improvement over the next few years. Given mix of business, we also point out that ALL's earnings have had minimal reserve release benefit versus many other more diversified peers that will likely have earnings and ROE pressure from declining reserve releases.” Allstate closed Monday at $31.29.