Why Allstate Stock Raced 5% Higher Today

Veteran insurance company Allstate (NYSE: ALL) hit a major stock-market milestone on Wednesday. The company shares surged by 5% to close at the highest level in their history. The soaring company also benefited from several positive analyst moves. Allstate's rise trounced that of the S&P 500 index, which rose by slightly under 0.4% on the day.

A large asset sale

Investors were particularly excited by a major divestment announced by Allstate that morning. The company said it has signed a definitive agreement to sell its employer voluntary-benefits business for a cool $2 billion in cash. The buyer is peer insurance company StanCorp Financial.

The move is part of Allstate's efforts to exit its health and benefits operations. Following the sale, two divisions will remain under that umbrella -- individual and group health.

In its press release divulging the employer voluntary-benefits sale, Allstate said its realized and planned divestments will allow the affected units "to realize their full growth potential by combining... with companies that have additional capabilities."

Allstate said that it expects to book a gain of around $600 million from the announced sale and increase its deployable capital by $1.6 billion. The deal is anticipated to close in the first half of next year.

Share buybacks might be brought forward

Several analysts reiterated their positive takes on Allstate following Wednesday's announcement. One was TD Cowen's Andrew Kligerman, who maintained his buy recommendation and $193 per-share price target on the insurer's stock. He feels that the deal could be beneficial for the stock due to the increased possibility for share buybacks to be introduced sooner rather than later.

Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy .