Lincoln National (LNC): Revisiting Valuation as Q3 Earnings Expectations Shift Investor Focus

Lincoln National (LNC) is drawing extra attention this week as investors look ahead to its third quarter earnings announcement on Thursday morning. The insurance company’s expected return to revenue growth comes after several of its industry peers posted mixed results recently.

See our latest analysis for Lincoln National.

Lincoln National’s share price has rallied 26% so far this year, reflecting shifting sentiment as investors anticipate the company’s return to growth and digest mixed signals from recent sector peers’ earnings. Over the past year, the total shareholder return comes in at an impressive 29%, underscoring renewed momentum after a tough stretch for much of the industry.

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With Lincoln National’s share price rebounding and analysts forecasting renewed growth, investors now face a pivotal question: is further upside still ahead, or has the market already factored in the company’s improving outlook?

Most Popular Narrative: 8.3% Undervalued

With Lincoln National’s fair value set at $43.75, which is around 8% above its last close, there is a clear belief that the stock carries more upside if current expectations are met. The narrative driving this fair value points to fundamental changes underway at the company.

"Lincoln National's transformation toward a more diversified and capital-efficient product mix, especially in higher-margin, less capital-intensive areas like supplemental health and spread-based annuities, positions them to benefit from rising demand as Americans focus more on retirement readiness and financial wellness, supporting stronger long-term revenue and net margin growth. The ongoing digital modernization and investments in technology, from enhanced digital tools for customers/producers to automation in sales and claims, are expected to drive expense reductions and boost operational scalability, thereby improving net margins and supporting higher future earnings."

Read the complete narrative.

Ready to find out what projections back up that higher price? The narrative is built on aggressive assumptions about future growth, an evolving business mix, and bold margin improvement. Click through to uncover the numbers that make up this fair value calculation.

Result: Fair Value of $43.75 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, risks remain around legacy variable annuity exposures and potential challenges in modernizing technology. Either of these issues could disrupt Lincoln National’s turnaround story.

Find out about the key risks to this Lincoln National narrative.

Build Your Own Lincoln National Narrative

Keep in mind, if the current perspective does not resonate with you or you’d rather dive into your own research, you have the option to build your own narrative in just a few minutes. Do it your way

A great starting point for your Lincoln National research is our analysis highlighting 4 key rewards and 1 important warning sign that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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