Is It Worth Investing in Allstate (ALL) Based on Wall Street’s Bullish Opinion?

When deciding whether to buy, sell, or hold a stock, investors often rely on analysts’ recommendations. Media reports about changes in the ratings of brokers (or brokers) often affect stock prices, but does it really matter?

Let’s take a look at what these Wall Street heavyweights have to say Allstate (ALL) before we discuss the reliability of brokerage recommendations and how to use them to your advantage.

Allstate currently has an average brokerage recommendation (ABR) of 1.62, on a scale of 1 to 5 (Strong Buy to Strong Sell), calculated based on the actual recommendation (Buy, Hold, Sell, etc.) made by 21 brokerage houses job. An ABR of 1.62 is between Strong Buy and Buy.

Of the 21 recommendations receiving ABR’s current rating, 16 are Strong Buy and one is Buy. Buy and Buy are strong for 76.2% and 4.8% of all recommendations.

Check out the price target & stock forecast for Allstate here>>>

Although ABR calls for buying Allstate, it may not be wise to make an investment decision based on this information alone. Many studies have shown the lack of success of sales advice to direct investors to pick stocks with the best price growth potential.

Are you wondering why? The interest rates of companies that trade in the products they cover often result in large positive biases that are shown by their analysts. Our research shows that for every “Strong Sell” recommendation, the retail industry assigns five “Strong Buy” recommendations.

In other words, their interests are not aligned with those of retail investors, and it rarely indicates where the stock price may be heading. Therefore, the best use of this information may be to support your own research or indicators that have proven to be successful in predicting stock price movements.

Zacks Rank, our stock ranking tool with extensive external research records, divides stocks into five groups, from Zacks Rank #1 (Strong Buy) to Zacks Rank #5 (Strong Sell), and is an indicator effectiveness of stock products. price performance in the near future. Therefore, using ABR to support Zacks Rank can be a good way to make profitable investment decisions.

Despite the fact that Zacks Rank and ABR both appear on a scale from 1 to 5, they are two different things.

Dealer recommendations are the only basis for calculating ABR, which is usually expressed in decimals (such as 1.28). On the other hand, Zacks Rank is an equity index designed to use the power of earnings analysis. It is shown in whole numbers — 1 to 5.

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