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Lincoln National: A Strong Buy - Analyst Blog

Posted
9/24/2013 2:17:00 PM
By: Zacks.com
Referenced Stocks:DIA;LFC;LNC;SFG;TMK

On Sep 24, Zacks Investment Research upgraded Lincoln National Corporation ( LNC ) to a Zacks Rank #1 (Strong Buy).

Why the Upgrade?

Lincoln National has been witnessing rising earnings estimates on the back of strong second-quarter 2013 results. Moreover, this insurance and investment manager delivered positive earnings surprises in 3 out of the last 4 quarters with an average beat of 5.9%. Shares gained nearly 0.5% since the company reported solid second quarter results.

Lincoln National's second quarter operating earnings per share came in at $1.27, surpassing the Zacks Consensus Estimate of $1.15 and year ago earnings by 16.5%. The outperformance was driven by improved sales of insurance policies, variable annuities as well as non-medical net earned premiums.

Additionally, Lincoln Financial has undertaken a number of initiatives over the last couple of months that are expected to be potent to its growth in the upcoming period. The introduction of an e-ticket system and e-delivery for its hybrid life insurance policies on Aug 6, 2013 not only marks the expansion of Lincoln National's electronic business, but also strengthens its life insurance portfolio. The e-business of Lincoln National also has been fortified by the launch of iPipeline iGO e-App that allows professionals to complete and submit insurance applications electronically. On Aug 13, 2013, it launched a variable universal life insurance product named Lincoln SVUL that we believe will enhance its competitive position in the life insurance market.

Moreover, the strengthening of the company's Ibbotson Insight Series through the launch of a number of new lineups and the introduction of the company's first ever deferred income annuity (DIA) named Lincoln Deferred Income Solutions in Sep 2013 is expected to bolster top line growth. Its clientele base is also expected to increase on account of its deal with the blood center, OneBlood on Aug 8, 2013, whereby it will provide employer sponsored retirement plans to OneBlood employees.   

The Zacks Consensus Estimate for 2013 increased 5.1% to $4.73 per share as 15 of 17 estimates were revised higher over the last 60 days. The Zacks Consensus Estimate for 2014 also increased approximately 5.1% to $5.20 as 13 of 17 estimates moved north over the last 60 days.

Other Stocks to Consider

Among other insurers, China Life Insurance Co. Ltd. ( LFC ), StanCorp Financial Group Inc. ( SFG ) and Torchmark Corporation ( TMK ) carry a Zacks Rank #2 (Buy).



CHINA LIFE INS (LFC): Free Stock Analysis Report

LINCOLN NATL-IN (LNC): Free Stock Analysis Report

STANCORP FNL CP (SFG): Free Stock Analysis Report

TORCHMARK CORP (TMK): Free Stock Analysis Report

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Zacks Investment Research