Allstate has shed nearly a quarter of its short interest in the past week. Now a second analyst firm has piled on with a downgrade — even as the bears are leaving.
Keefe, Bruyette & Woods downgraded ALL to Underperform on August 20, cutting the price target to $250 from $255. That follows a Citigroup downgrade to Sell on August 11, where analyst Matthew Heimermann raised his target to $240 from $226 — a rare move of lowering conviction while nudging the number up. Both downgrades arrived into a stock trading at $254.54, sitting essentially at the lower targets. The market is already priced where the bears want it.
The contradiction is sharp. Sell-side bearishness is growing. But the actual short sellers are gone.
Short interest sits at 2.3% of free float as of August 20 — down 27.7% over 30 days and near its lowest point in the tracked history. The lending market is exceptionally loose. Availability stands at 2,833%, meaning there are roughly 28 shares available to borrow for every one currently out on loan. Cost to borrow has pulled back to 0.29% after briefly spiking mid-week. The borrow market shows no sign of a new short campaign building.
The ORTEX short score has also drifted lower, to 34.7 from 38.9 just two weeks ago. That decline reflects reduced short pressure, not building conviction.
The analyst picture is the most fractured it has been since earnings. JP Morgan's Pablo Singzon raised his Overweight target to $292 on August 11. Piper Sandler went to $300. Freedom Broker upgraded to Buy at $297. Those three sit well above the current price and see meaningful upside.
Keefe Bruyette, Citigroup, Wells Fargo, and Barclays all sit at Underperform or Underweight. Consensus has settled at Hold, with a mean target of $274 — roughly 8% above current levels. Two sell-side analysts now have targets below where the stock is trading.
Senior insiders have been sellers. COO Mario Rizzo sold over $14.8 million in shares on August 11. Division president John Dugenske sold nearly $8.9 million across three transactions on August 7. Both sales followed the post-earnings price pop. Neither represents a panic exit — the significance scores are low — but the direction is consistent.
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