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Lincoln National (LNC)
NYSE:LNC
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Lincoln National
(NYSE:LNC)
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Rating:63Neutral
Price Target:
$38.00
▲(5.53% Upside)
Action:DowngradedDate:02/20/26
The score reflects improved profitability and capital strength plus attractive valuation (low P/E and solid dividend), offset by historically weak and inconsistent cash flow generation and currently mixed/soft technical momentum.
Positive Factors
Capital strength
Restoring RBC above the 400% target with a meaningful buffer and materially lower leverage provides durable regulatory and financial flexibility. This strengthens the company's ability to support product liabilities, increase subsidiary remittances, fund dividends/returns, and pursue capital-efficient initiatives across market cycles.
Annuities scale & mix
Record annuity balances and strong sales growth expand the fee and spread-bearing asset base, enhancing earnings durability. Scale plus a strategic shift toward spread-based products supports steadier investment spread income and lowers sensitivity to equity markets, improving long-run predictability of operating earnings.
Improving cash conversion
A meaningful improvement in earnings-to-cash conversion and multi-year adjusted operating income growth indicate operational progress. Higher cash conversion increases capacity for remittances, debt repayment, and shareholder returns, improving financial optionality and resilience across economic cycles.
Negative Factors
Weak historical cash flow
Persistent negative operating/free cash flow in multiple years highlights a structural earnings-to-cash conversion problem. That pattern constrains organic funding for capital returns, leaves reliance on nonrecurring sources and remittances, and raises vulnerability to liquidity stress during adverse markets or claim spikes.
Retirement Plan Services outflows
Sustained participant-driven outflows shrink the fee base and asset-linked earnings in retirement services. Persistent net withdrawals compel margin recovery via cost cuts or repricing, limit scale benefits, and create longer-term headwinds to stable revenue and operating leverage in a core distribution channel.
Product mix/reporting headwinds
Shifting net interest income out of annuities operating metrics reduces reported operating earnings and signals structural changes in product economics. Continued variable annuity outflows and mix shifts toward lower-ROA spread products can compress returns on assets and reduce float available for investment, weighing on long-term profitability.
Lincoln National (LNC) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$6.77B
Dividend Yield3.93%
Average Volume (3M)1.89M
Price to Earnings (P/E)6.1
Beta (1Y)1.14
Revenue Growth35.76%
EPS Growth636.97%
CountryUS
Employees9,783
SectorFinancial
Sector Strength70
IndustryInsurance - Life
Share Statistics
EPS (TTM)2.21
Shares Outstanding190,090,410
10 Day Avg. Volume2,332,627
30 Day Avg. Volume1,892,551
Financial Highlights & Ratios
PEG Ratio-0.10
Price to Book (P/B)0.75
Price to Sales (P/S)0.45
P/FCF Ratio-48.71
Enterprise Value/Market Cap0.53
Enterprise Value/Revenue0.20
Enterprise Value/Gross Profit0.99
Enterprise Value/Ebitda2.28
Forecast
1Y Price Target
$47.89Price Target Upside32.99% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering9
EPS Forecast (FY)8.05
Revenue Forecast (FY)$20.06B
Lincoln National Business Overview & Revenue Model
Company DescriptionLincoln National Corporation, through its subsidiaries, operates multiple insurance and retirement businesses in the United States. It operates through four segments: Annuities, Retirement Plan Services, Life Insurance, and Group Protection. The Annuities segment offers fixed, variable, and indexed variable annuities. The Retirement Plan Services segment provides employers with retirement plan products and services primarily in the defined contribution retirement plan marketplace. This segment offers individual and group variable annuities, group fixed annuities, and mutual fund-based programs; and a range of plan services, including plan recordkeeping, compliance testing, participant education, and trust and custodial services. The Life Insurance segment provides life insurance products, including term insurance, such as single and survivorship versions of universal life insurance; variable universal life insurance; indexed universal life insurance products; and critical illness and long-term care riders. The Group Protection segment offers group non-medical insurance products comprising short and long-term disability, statutory disability and paid family medical leave administration and absence management services, term life, dental, vision and accident, and critical illness benefits and services to the employer marketplace through various forms of employee-paid and employer-paid plans. The company distributes its products through consultants, brokers, planners, agents, financial advisors, third-party administrators, and other intermediaries. Lincoln National Corporation was founded in 1905 and is based in Radnor, Pennsylvania.
How the Company Makes MoneyLincoln National generates revenue primarily through the sale of insurance policies and financial products. Key revenue streams include premiums collected from life insurance policies, fees from annuity contracts, and investment income from the management of assets. The company earns fees on the assets under management in its retirement and investment products, contributing significantly to its earnings. Additionally, Lincoln National engages in strategic partnerships with financial advisors, broker-dealers, and other financial institutions, enhancing its distribution capabilities and broadening its market reach. The performance of its investment portfolio also plays a critical role in its profitability, as investment income is a substantial component of its overall revenue.
Lincoln National Key Performance Indicators (KPIs)
Any
Revenue by Type
Breaks down income sources, highlighting which products or services drive sales and revealing diversification or dependency on specific revenue streams.
Breaks down income sources, highlighting which products or services drive sales and revealing diversification or dependency on specific revenue streams.
Data provided by:
The Fly
The FlyLincoln National Earnings Call Summary
Earnings Call Date:Feb 12, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:May 07, 2026
Earnings Call Sentiment Positive
The call communicated substantial progress: multi-quarter and multi-year earnings growth, record annuity account balances, strong alternative investment returns, improved capital ratios and liquidity, and a meaningful improvement in free cash flow conversion. Management also highlighted several strategic shifts (more spread-based annuity mix, Bermuda affiliate expansion, captive consolidation) that strengthen durability of earnings. Near-term headwinds include ongoing variable annuity outflows, Retirement Plan Services outflows, higher G&A/variable compensation in Q4, and technical reporting changes that will shift ~$50 million of NII out of annuities operating income in 2026. Overall, the positive operational and capital progress materially outweighs the manageable near-term and reporting-related challenges.Q4-2025 Updates
Positive Updates
Adjusted Operating Income Growth
Fourth quarter adjusted operating income increased 31% year-over-year; Q4 adjusted operating income available to common stockholders was $434 million ($2.21 per diluted share). Full year 2025 adjusted income from operations available to common shareholders was over $1.5 billion, a 23% improvement vs. 2024 and the highest full-year adjusted operating income in four years.
Strong Net Income and Hedge Performance
Reported Q4 net income available to common stockholders of $745 million ($3.80 per diluted share). Hedge program performed in line with expectations; positive movement in market risk benefits contributed to GAAP net income being higher than adjusted operating income.
Annuities Sales and Account Growth
2025 annuity sales volumes up 25% year-over-year. RILA sales increased 35%, fixed annuity sales +11%, and variable annuity sales +27% for the full year. Ending annuity account balances net of reinsurance reached a record $175 billion, up 7% year-over-year; fixed annuity account balances increased 20% YoY.
Shift Toward Spread-Based Products
Spread-based products now represent 30% of total annuity account balances net of reinsurance (up from 27% a year ago). Net flows into spread-based products exceeded $1 billion in the quarter, supporting more stable earnings and capital-efficient mix.
Group Protection Performance
Group Protection delivered a record year: full-year operating earnings (ex. annual assumption review) of $493 million, up 16% year-over-year; full-year premium growth nearly 7%; Q4 operating income $109 million with margin of 7.9%. Supplemental health sales increased over 40%.
Life Business Turnaround
Life moved from an operating loss to positive earnings: Q4 operating earnings $77 million vs. operating loss of $15 million in prior-year quarter. Full year Life operating earnings (ex. annual assumption review) $146 million vs. operating loss of $71 million in prior year, an improvement of over $200 million. Executive benefits sales grew to $265 million from $59 million in 2024.
Investment and Alternative Returns
Alternative investments returned nearly 12% annualized for the quarter ($124 million) and approximately 10% for the full year (in line with target). New money invested at a yield of ~5.3% for the quarter and ~5.7% for the full year, materially above portfolio yield (65–110 bps differential). Portfolio credit quality remains high with 97% investment grade.
Capital Position and Liquidity Strengthened
Restored capital above the 400% RBC target with an additional ~20% risk buffer; leverage ratio improved by ~500 basis points since 2023 and is back at long-term target. Holding company liquidity ended the year at ~$1.1 billion ( ~$655 million net of $400 million prefunding for senior notes). Alpine (Bermuda affiliate) paid a $75 million dividend and is being used to enhance capital efficiency.
Free Cash Flow Improvement
Adjusted operating income grew from $908 million in 2023 to over $1.5 billion in 2025 (≈69% higher). Free cash flow conversion improved to 45% in 2025 (up 10 percentage points from 35% in 2023), with medium-term subsidiary remittance expectations rising (management referenced ~$1.2 billion medium-term remittances on slides/Q&A).
Operational and Structural Actions
Completed captive consolidation that reduced reserve financing costs and simplified legal structure (Q4 GAAP benefit ≈$10 million); management expects an incremental ~$25–30 million GAAP improvement to Life in 2026 plus additional free cash flow benefits. Ongoing expense discipline, technology modernization, expanded Bermuda affiliate role, and targeted distribution/product improvements.
Negative Updates
Variable Annuity Outflows and Mix Shift
Variable annuity net outflows continued in Q4, consistent with recent quarters; management expects intentionally lower VA volumes in 2026 as part of reducing market sensitivity. Shift toward spread-based products lowers ROA (lower return on assets) although it stabilizes earnings.
Retirement Plan Services Net Outflows and Pressure
Retirement Plan Services experienced participant-driven net outflows of approximately $1 billion in the quarter; full-year operating earnings of $163 million were flat year-over-year. Management expects net flows to remain negative in 2026 as they prioritize profitability, indicating near-term revenue headwinds and a need for expense/investment fixes.
Near-Term Annuit ies and Life Seasonality / Headwinds
Management flagged sequential pressure on annuities earnings in Q1 2026 due to two fewer fee days, resetting of favorable mortality experience, and an allocation change moving ~$50 million of NII from annuities operating income to nonoperating income (no change to economics/free cash flow). Life typically sees seasonal weakness in Q1 and mortality normalization may reduce near-term volatility benefits.
Higher G&A and Variable Compensation
Fourth quarter G&A increased sequentially and year-over-year driven by higher variable compensation (from strong sales) and investments (e.g., retaining 100% of fixed annuity flows and technology upgrades in Group Protection). Continued expense discipline is a stated priority, but near-term expense pressure was evident.
Competitive Pressure in RILA Market
RILA market competitiveness increased; management expects RILA sales in 2026 to be broadly consistent with the past 2–3 years rather than expanding rapidly, reflecting deliberate discipline to prioritize profitability over top-line growth amid intensifying competition.
Reallocation of NII and Reporting Impact
Management will reallocate net interest income on collateral for index credit hedging from annuities operating income to nonoperating income beginning in 2026 (would have shifted ~$50 million of 2025 annuities operating income). The change provides cleaner operating metrics but will reduce reported annuities operating income under the new definition.
Company Guidance
Management guided that 2026 and the medium term will prioritize capital strength, disciplined profitable growth and increased remittances to the holding company, with subsidiary remittances expected to rise to roughly $1.2–$1.3 billion (vs. $845 million in 2025) and potential capital returns to shareholders in the $400–$600+ million range over the next two years (the dividend is expected to be ~ $350 million, implying buybacks could be modest in 2026); they reiterated strong capital metrics (RBC restored above the 400% target with a ~20% buffer and leverage down ~500 bps since 2023 to target levels, ending the year near ~439%), improved cash generation (adjusted operating income > $1.5 billion in 2025 vs $908 million in 2023, free cash flow conversion 45% in 2025 vs 35% in 2023), and holding company liquidity of ~$1.1 billion (net ~$655 million after $400 million prefunding for 2026 debt); operational guidance included expectable Q1 2026 headwinds for annuities (two fewer fee days and mortality reset), a reallocation that would move about $50 million annually of annuities net interest income to non‑operating, continued emphasis on lower market sensitivity in annuities (annuity account balances net of reinsurance $175 billion, spread‑based products 30% of balances, RILA 22%, fixed annuity balances +20% YoY; annuities FY operating income ~ $1.2 billion), Group Protection at ~9% margin and $493 million operating earnings (+16%) with ~7% premium growth, Life improving to $146 million operating earnings (ex‑assumption review) from a $71 million loss, and Retirement Plan Services focusing on profitability as net outflows persist (Q4 avg balances $124 billion, base spreads 110 bps, Q4 net outflows ~ $1 billion).Lincoln National Financial Statement Overview
Summary
Earnings and balance-sheet metrics improved meaningfully versus the 2022–2023 stress period, but cash generation is the key weakness: operating/free cash flow is negative in most years shown and earnings-to-cash conversion remains a concern despite the reported profit recovery.Income Statement
Profitability recovered meaningfully after the 2023 loss, with 2024 and 2025 returning to solid positive earnings and healthy mid-single-digit net margins in 2025. However, revenue growth is volatile (sharp decline in 2023, modest rebound in 2024, then a steep drop in 2025), and profit margins have swung widely across the cycle, indicating uneven earnings quality and sensitivity to market/assumption changes.58
Neutral
Balance Sheet
Leverage looks manageable for the period shown, with debt relative to equity improving from elevated levels in 2022–2023 to a more moderate level in 2025, alongside a rebound in equity. Returns on shareholder capital also improved from negative in 2023 to positive in 2025, but they remain highly volatile (very high in 2024, negative in 2023), suggesting balance-sheet outcomes can shift materially year to year.64
Positive
Cash Flow
Cash generation is the key weak spot: operating cash flow and free cash flow are negative in most years shown (2021, 2023, 2024, 2025), including large outflows in 2023–2024, with only 2022 showing strong positive cash inflow. The persistence of negative cash flow despite positive net income in 2024–2025 raises concerns around earnings-to-cash conversion and liquidity flexibility through the cycle.33
Negative
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 18.21B | 17.99B | 11.71B | 18.93B | 17.61B |
| Gross Profit | 10.44B | 4.60B | 50.00M | 2.43B | 3.90B |
| EBITDA | 1.56B | 4.45B | -773.00M | 2.07B | 4.96B |
| Net Income | 1.18B | 3.27B | -752.00M | 1.36B | 3.78B |
Balance Sheet | |||||
| Total Assets | 417.20B | 390.83B | 372.41B | 334.22B | 387.30B |
| Cash, Cash Equivalents and Short-Term Investments | 9.50B | 26.72B | 92.10B | 103.08B | 121.36B |
| Total Debt | 6.27B | 6.36B | 6.12B | 6.63B | 6.63B |
| Total Liabilities | 406.30B | 382.56B | 365.52B | 329.12B | 367.03B |
| Stockholders Equity | 10.91B | 8.27B | 6.89B | 5.10B | 20.27B |
Cash Flow | |||||
| Free Cash Flow | -167.00M | -2.01B | -2.07B | 3.61B | -217.00M |
| Operating Cash Flow | -167.00M | -2.01B | -2.07B | 3.61B | -217.00M |
| Investing Cash Flow | -4.01B | 821.00M | -3.33B | -11.65B | -3.58B |
| Financing Cash Flow | 7.88B | 3.62B | 5.43B | 8.77B | 4.71B |
Lincoln National Technical Analysis
Negative
36.01
Price Trends
42.04
Negative
41.12
Negative
38.51
Negative
Market Momentum
-1.25
Positive
32.81
Neutral
11.16
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For LNC, the sentiment is Negative. The current price of 36.01 is below the 20-day moving average (MA) of 39.86, below the 50-day MA of 42.04, and below the 200-day MA of 38.51, indicating a bearish trend. The MACD of -1.25 indicates Positive momentum. The RSI at 32.81 is Neutral, neither overbought nor oversold. The STOCH value of 11.16 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative 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
UnderperformOutperform
Sector (68)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
78 Outperform | $11.33B | 10.11 | ― | 0.74% | 3.73% | 17.47% | |
77 Outperform | $3.06B | 12.11 | 6.05% | 2.91% | -4.58% | ― | |
68 Neutral | $18.00B | 11.42 | 9.92% | 3.81% | 9.73% | 1.22% | |
63 Neutral | $6.77B | 6.10 | 12.27% | 3.93% | 35.76% | 636.97% | |
62 Neutral | $3.97B | 18.12 | 11.12% | 1.54% | -1.61% | 15.79% | |
58 Neutral | $7.44B | -334.28 | 0.27% | 2.98% | 24.94% | ― | |
54 Neutral | $3.54B | 10.47 | 7.38% | ― | 27.71% | ― |
* Financial Sector Average
LNC
Lincoln National
36.01
0.40
1.13%
CNO
CNO Financial
42.32
2.15
5.35%
GL
Globe Life
144.15
23.21
19.19%
BHF
Brighthouse Financial
60.76
2.46
4.22%
JXN
Jackson Financial Incorporation
112.92
28.85
34.32%
FG
F&G Annuities & Life Inc
23.32
-17.50
-42.87%
Lincoln National Corporate Events
Business Operations and StrategyFinancial Disclosures
Lincoln National Reports Strong Q4 and 2025 Results
Positive
Feb 12, 2026
Lincoln Financial on February 12, 2026 reported fourth-quarter and full-year 2025 results, highlighting strong momentum across all business segments and improved profitability versus the prior year. Fourth-quarter net income available to common shareholders was $745 million, or $3.80 per diluted share, while adjusted operating income was $434 million, or $2.21 per diluted share, with the gap largely driven by non-economic changes in market risk benefits.
Management cited disciplined capital management and a more efficient operating model, with holding company liquidity rising to $655 million at year-end 2025. Annuities posted record-high account balances of $175 billion and a 33% sales increase, life insurance swung to higher earnings on better mortality and investment returns, group protection grew premiums 8% despite lower sales off a record 2024 quarter, and retirement plan services increased operating income and deposits even as net outflows widened, underscoring a more resilient but still evolving earnings profile for investors and policyholders.
The most recent analyst rating on (LNC) stock is a Hold with a $43.00 price target. To see the full list of analyst forecasts on Lincoln National stock, see the LNC Stock Forecast page.
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
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.