TD Cowen has begun coverage on shares of Lincoln National Corporation (NYSE: NYSE:LNC), assigning a Hold rating to the stock with a price target of $34.
The coverage initiation is based on a sum-of-the-parts analysis, which takes into account the company's projected earnings across different product lines for the year 2025, along with adjustments for excess capital, liability exposures, and investments.
The $34 price target suggests that TD Cowen is expecting the stock to trade at a blended price-to-earnings (P/E) multiple of 4.5 times the estimated 2025 earnings per share (EPS). This valuation reflects the firm's view of the company's future financial performance and market conditions.
Lincoln National Corporation, which operates in the financial services sector, is being observed by TD Cowen for its potential performance based on projected earnings and current market factors. The Hold rating indicates that the firm does not see significant movement in the stock's price in the near term, relative to current levels.
The analysis by TD Cowen suggests a cautious outlook on the stock, advising investors to maintain their positions without suggesting an increase or decrease in their holdings. The Hold rating is a neutral stance, indicating that the stock is expected to perform in line with the market or sector averages.
In other recent news, Lincoln National Corporation reported significant developments, including a substantial increase in its Risk-Based Capital (RBC) ratio, now exceeding 420%, following the sale of its wealth management business.
The company's adjusted operating income reached $319 million, or $1.84 per share, with net income peaking at $884 million, or $5.11 per diluted share. Additionally, Lincoln National Corporation announced changes to its board structure, reducing the number of board members from twelve to eleven, reflecting the company's proactive approach to corporate governance.
Moreover, the company mourns the loss of board member Michael Mee, whose contributions were acknowledged by executives. Barclays initiated coverage on Lincoln Financial, assigning an Equalweight rating and setting a price target of $35.00, influenced by the company's improved capital position.
The company's executive severance plan was recently revised to include the CEO among the participating officers, detailing a severance package equal to twice the CEO's annual base salary plus the target annual incentive bonus, distributed over 104 weeks following termination.
Finally, Lincoln Financial is preparing for the launch of its Bermuda-based reinsurance subsidiary, Alpine, as part of its ongoing efforts to diversify its product offerings and fortify its capital foundation.
InvestingPro Insights
To complement TD Cowen's analysis, InvestingPro data offers additional insights into Lincoln National Corporation's financial health. The company's P/E ratio stands at 3.24, which aligns with TD Cowen's projected blended P/E multiple of 4.5 times estimated 2025 earnings. This low earnings multiple is highlighted as an InvestingPro Tip, suggesting the stock may be undervalued relative to its earnings.
Despite the cautious Hold rating from TD Cowen, InvestingPro Tips indicate that Lincoln National's net income is expected to grow this year, and analysts predict the company will be profitable. This positive outlook is balanced by the fact that 4 analysts have revised their earnings downwards for the upcoming period, which may explain TD Cowen's conservative stance.
Lincoln National's dividend yield of 5.74% and its 54-year streak of maintaining dividend payments could be attractive to income-focused investors, potentially supporting the stock price. The company's market cap of $5.35 billion and revenue of $13.59 billion in the last twelve months provide context for its size and operations.
For investors seeking a more comprehensive analysis, InvestingPro offers 5 additional tips that could provide further insights into Lincoln National's investment potential.
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