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Lincoln National (LNC)
NYSE:LNC
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Lincoln National
(NYSE:LNC)67Neutral
Positive Factors
Financial Guidance
LNC raised its 2026 FCF conversion guide, showing a positive outlook.
Financial Performance
LNC delivered a solid 4Q:24 result, led by Group Benefits.
Negative Factors
Life Insurance Segment
Life Insurance segment missed expectations due to higher mortality.
Lincoln National (LNC) vs. S&P 500 (SPY)
Market Cap
$6.11B
Dividend Yield4.75%
Average Volume (3M)1.69M
Price to Earnings (P/E)1.9
Beta (1Y)1.64
Revenue Growth47.95%
EPS GrowthN/A
CountryUS
Employees11,024
SectorFinancial
Sector Strength93
IndustryInsurance
Share Statistics
EPS (TTM)18.38
Shares Outstanding170,403,820
10 Day Avg. Volume1,677,992
30 Day Avg. Volume1,690,253
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)0.36
Price to Cash Flow (P/CF)7.30
P/FCF Ratio5.60
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$39.22Price Target Upside9.31% Upside
Rating ConsensusHold
Number of Analyst Covering9
Lincoln National Business Overview & Revenue Model
Company DescriptionLincoln National Corporation (LNC), operating under the marketing name Lincoln Financial Group, is a prominent American holding company that offers a diverse range of financial services and solutions. Primarily, it operates in the sectors of insurance and retirement planning, providing life insurance, annuities, retirement plan services, and group protection to individuals and institutional clients. The company is headquartered in Radnor, Pennsylvania, and leverages its expertise in risk management and financial planning to help clients secure their financial futures.
How the Company Makes MoneyLincoln National Corporation earns its revenues through a variety of channels within the financial services sector. The primary revenue streams include premiums from life insurance policies, fees from annuity contracts, and asset management fees related to retirement plan services. The company also generates income through investment activities, where it manages reserves from collected premiums to earn returns. Additionally, Lincoln National benefits from strategic partnerships and distribution agreements with financial advisors, brokers, and other institutions, which help expand its customer base and enhance its market reach. These partnerships, along with its diversified product offerings, contribute significantly to its earnings and financial stability.
Lincoln National Financial Statement Overview
Summary
Lincoln National shows a mixed financial picture. The company made a significant recovery in net income in 2024, improving profitability ratios. However, inconsistent revenue growth, high leverage, and negative cash flows remain areas of concern. Strategic focus on stabilizing cash flow and managing debt levels is essential for sustained financial health.Income Statement
Lincoln National's income statement reflects a volatile performance. While the company achieved a strong turnaround in net income to $3.275 billion in 2024 from a loss in 2023, the overall revenue growth is inconsistent, with dips and rebounds over the years. The absence of positive EBIT and EBITDA margins in recent years indicates profitability challenges, though the net profit margin improved significantly in 2024 due to net income gains.65
Positive
Balance Sheet
The balance sheet shows a moderate financial position with some concerns. The debt-to-equity ratio is relatively high, indicating potential leverage risks, though it slightly improved in 2024. Return on equity surged to 39.60% in 2024, driven by higher net income, showcasing improved shareholder returns. However, the company's equity ratio is low, suggesting limited buffer against liabilities.60
Neutral
Cash Flow
Cash flow analysis reveals challenges, primarily due to negative free cash flow and operating cash flow in recent years. Despite a significant increase in financing cash flow, the company struggles with cash generation from operations. The free cash flow to net income ratio indicates cash flow issues, though the operating cash flow to net income improved slightly due to the net income rise in 2024.50
Neutral
| Breakdown | |||||
| TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 12.66B | 18.44B | 11.64B | 18.81B | 19.23B | 17.44B | Gross Profit |
| 13.47B | 18.44B | 11.64B | 18.81B | 19.23B | 17.44B | EBIT |
| 65.00M | 0.00 | -821.00M | -2.53B | 815.00M | -276.00M | EBITDA |
| 1.53B | 0.00 | -778.00M | 42.20B | 1.96B | 35.90B | Net Income Common Stockholders |
| 354.00M | 3.27B | -752.00M | 1.36B | 1.41B | 499.00M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 5.80B | 5.80B | 3.37B | 103.08B | 121.36B | 124.75B | Total Assets |
| 390.83B | 390.83B | 372.41B | 334.22B | 387.30B | 365.94B | Total Debt |
| 6.16B | 6.16B | 6.12B | 6.46B | 6.63B | 6.68B | Net Debt |
| 355.00M | 355.00M | 2.76B | 3.11B | 4.01B | 4.97B | Total Liabilities |
| 382.56B | 382.56B | 365.52B | 329.12B | 367.03B | 6.68B | Stockholders Equity |
| 8.27B | 8.27B | 6.89B | 5.10B | 20.27B | 22.70B |
| Cash Flow | Free Cash Flow | ||||
| -4.10B | -2.01B | -2.07B | 4.03B | 151.00M | 534.00M | Operating Cash Flow |
| -4.10B | -2.01B | -2.07B | 4.03B | 151.00M | 534.00M | Investing Cash Flow |
| 824.00M | 821.00M | -3.33B | -11.64B | -3.57B | -9.48B | Financing Cash Flow |
| 6.76B | 3.62B | 5.43B | 8.77B | 4.32B | 8.09B |
Lincoln National Technical Analysis
Neutral
35.88
Price Trends
34.36
Positive
33.89
Positive
32.07
Positive
Market Momentum
0.82
Positive
45.28
Neutral
46.57
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For LNC, the sentiment is Neutral. The current price of 35.88 is below the 20-day moving average (MA) of 37.55, above the 50-day MA of 34.36, and above the 200-day MA of 32.07, indicating a neutral trend. The MACD of 0.82 indicates Positive momentum. The RSI at 45.28 is Neutral, neither overbought nor oversold. The STOCH value of 46.57 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for LNC.
Lincoln National Risk Analysis
Lincoln National disclosed 44 risk factors in its most recent earnings report. Lincoln National reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Lincoln National Peers Comparison
Overall Rating
UnderperformOutperform
Sector (64)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
75 Outperform | $13.77B | 8.24 | 16.23% | 2.00% | 4.03% | 45.42% | |
72 Outperform | $20.08B | 13.34 | 14.17% | 3.21% | 18.02% | 171.70% | |
71 Outperform | $47.38B | 15.77 | -3.30% | 1.89% | -28.56% | 1.14% | |
67 Neutral | $6.11B | 1.95 | 39.61% | 4.75% | 47.95% | ― | |
65 Neutral | $55.56B | 13.72 | 16.13% | 2.54% | 6.10% | 225.22% | |
64 Neutral | $14.34B | 10.61 | 9.28% | 4.07% | 18.04% | -9.54% | |
61 Neutral | $38.79B | 14.61 | 9.78% | 4.63% | 34.25% | 11.22% |
* Financial Sector Average
Performance Comparison
LNC
Lincoln National
35.88
11.03
44.39%
AIG
American International Group
79.85
7.48
10.34%
MET
Metlife
81.56
13.12
19.17%
PFG
Principal Financial
85.62
7.39
9.45%
PRU
Prudential Financial
109.59
5.39
5.17%
UNM
Unum Group
77.91
28.78
58.58%
Lincoln National Earnings Call Summary
Earnings Call Date: Feb 6, 2025 | % Change Since: 6.25% | Next Earnings Date: May 8, 2025
Earnings Call Sentiment Positive
The earnings call presented a strong overall performance for Lincoln National Corporation, with significant achievements in group protection and annuities. However, challenges remain in the life insurance segment, particularly due to elevated claim severity and plan terminations affecting retirement plan services. Despite these issues, the company's robust capital position and improved free cash flow conversion provide a positive outlook.Highlights
Record Fourth Quarter for Group Protection Business
The group protection business delivered record fourth-quarter earnings, more than doubling year over year, with a margin of 8.4%, and achieved a record year for sales, earnings, and margin.
Annuities Business Growth
Annuities delivered robust earnings growth for the quarter and full year, reaching its highest full-year sales in five years, with full-year sales increasing 7% compared to the prior year.
Retirement Plan Services Success
Retirement plan services increased quarterly earnings by 13% year over year and generated full-year deposit growth of 25%, marking its tenth consecutive year of positive flows.
Strong Capital Position
Ended 2024 with an estimated RBC ratio of over 430%, surpassing the target of 420%, providing added financial flexibility.
Improved Free Cash Flow Conversion
Free cash flow conversion increased from 35% in 2023 to 39% in 2024.
Lowlights
Life Insurance Segment Challenges
Life insurance reported a fourth-quarter operating loss of $15 million due to elevated severity and the impacts of the Fortitude Re transaction, partially offset by above-target alternative investment income.
Known Plan Terminations Impacting Retirement Plan Services
Retirement plan services faced pressure from several known plan terminations, leading to net outflows for the quarter of $732 million.
Elevated Mortality in Life Insurance
Life insurance experienced elevated mortality driven by large claims, leading to an outsized impact from severity.
Company Guidance
During the call, Lincoln National Corporation provided guidance on several key metrics reflecting their strong performance in fiscal year 2024. The company achieved its highest full-year adjusted operating income in three years and ended 2024 with an estimated RBC ratio exceeding 430%, surpassing their target of 400% with a 20-point buffer. They reported a fourth-quarter adjusted operating income available to common stockholders of $332 million or $1.91 per share, and a GAAP net income of $1.7 billion. The group protection business delivered a record fourth quarter with earnings more than doubling year over year, achieving a margin of 8.4%, while annuities achieved their highest full-year sales in five years. Retirement plan services saw a full-year deposit growth of 25%, marking its tenth consecutive year of positive net flows. The company also improved its free cash flow conversion to 39% in 2024 from 35% in 2023, and they revised their 2026 free cash flow conversion outlook to a range of 45% to 60%, illustrating increased confidence in their long-term strategic objectives.Lincoln National Corporate Events
Executive/Board ChangesBusiness Operations and Strategy
Lincoln National Expands Board with Industry Veteran
Positive
Mar 4, 2025
On March 3, 2025, Lincoln National Corporation’s Board of Directors expanded from ten to eleven members with the election of Jim Morris, a seasoned leader in the life insurance industry. Morris, who retired as Chairman, President, and CEO of Pacific Life Insurance Company in 2022, brings extensive experience in financial and risk management, which is expected to enhance Lincoln’s strategic vision and shareholder value.
Business Operations and StrategyFinancial Disclosures
Lincoln National Reports Strong Q4 2024 Earnings
Positive
Feb 6, 2025
On February 6, 2025, Lincoln Financial reported its financial results for the fourth quarter and full year ending December 31, 2024. The company achieved a net income of $1.7 billion for the fourth quarter, driven by changes in market risk benefits and the fair value of derivatives. Lincoln Financial’s performance was boosted by strong results in Group Protection and Annuities, with the latter seeing its highest full-year sales since 2019. The company emphasized its strategic focus on building a solid capital foundation and operational efficiency, resulting in positive developments across its business segments, including record sales and earnings in Group Protection and significant growth in Retirement Plan Services, which saw a 25% increase in total deposits for the year.
Executive/Board Changes
Lincoln National Board Resignation and Bylaws Amendment
Neutral
Feb 4, 2025
On January 30, 2025, Janet Liang resigned from her position as a director on the Board of Lincoln National Corporation to pursue a new employment opportunity, with her resignation effective immediately. The Board subsequently amended the company’s Bylaws to reduce the number of authorized Board members from eleven to ten, effective January 31, 2025, which impacts the governance structure by streamlining the Board.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.